We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

American Accounting Scandals - Essay Example

Comments (0)
Running Head: American Accounting Scandals American Accounting Scandals American Accounting Scandals Introduction In the aftermath of the financial recession that rocked United States and the entire world, policymakers, stakeholders, experts and other observers are raising their fingers on various events, policies, and happenings that led the country to this disastrous recession…
Download full paper
American Accounting Scandals
Read TextPreview

Extract of sample
American Accounting Scandals

Download file to see previous pages... 55, 2009). Interestingly, this is not the first time in the history of United States that its accounting practices, approaches and system has received criticism and strict scrutiny from its stakeholders. After the bankruptcy of Enron and WorldCom in 2001 and 2003, respectively that was also the biggest accounting scandals of their time, the US accounting practices made the headlines all over the world (Ketz, pp. 234, 2003). This paper is an attempt to explore the accounting standards whether they are too flexible or too rigid. The discussion would include looking over the causes of Enron’s bankruptcy rooted in its accounting problem, debate between rules based accounting and principles based accounting and the problems with the possible convergence of accounting standards all over the world. ...
144, 2006). Non-transparent and unethical accounting was the most important cause attributed to the failure and downfall of Enron. In the year 2004, McLean wrote Enron scandal that, “The Enron scandal grew out of a steady accumulation of habits and values and actions that began years before and finally spiraled out of control” (Silverstone & Sheetz, pp. 22, 2007). Furthermore, another writer in an attempt to explain these “habits and values” wrote that, “the primary motivations for Enron's accounting and financial transactions seem to have been to keep reported income and reported cash flow up, asset values inflated, and liabilities off the books. (Duska, Duska, & Ragatz, pp. 74-75, 2011)” Without any doubts, Enron had some of the smartest minds in the company, as its executives and accountants, who were spot on in tweaking and twisting, the accounting laws to their advantages (Rapoport & Dharan, pp. 106, 2004). They used off balance sheet vehicles, complex financial structures and others to hide their debts and inflate their incomes. Furthermore, the mark to market accounting further allowed the company to manipulate its financial figures for deceiving the shareholders, creditors and other stakeholders. More importantly, Enron used the ambiguities and gaps in the mark to market accounting to inflate its income (Rezaee, pp. 175, 176, 2002; Mulford & Comiskey, pp. 44-46, 2005). Mark to Market accounting method requires showing the net present value of the cash flows from any long-term project and adjust the values of market assets according to the current market value. However, the problem with this method is that under certain situations and for certain projects, correct, accurate, and timely predictions about their future ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
Advanced Financial Reporting - Prevalence of Creative Accounting
Creative accounting is an innovative yet unethical practice that converts the sense of an accounting treatment while being within the scope of treatment prescribed by accounting standards. It can be said that taking advantages of the loopholes present in accounting standards is the other way of explaining creative accounting.
11 Pages(2750 words)Essay
The Regulatory Response to the Corporate Scandals in the USA and the EU was Diametrically Different
Usually, before investors decide to invest their money in any investment company, they seek to ensure that the financial situation of the company is secure and reliable.1 Also, they need to have confidence that the company will be properly managed and controlled in order to be profitable.
17 Pages(4250 words)Essay
Creative Accounting
The manipulations have taken place in different forms. While analysing the creative accounting in the context of Greek, Baralexis (2004) found out that the manipulation of accounting has been well documented in accounting literatures and there are examples of manipulation in account books dating back to 1920s.
14 Pages(3500 words)Essay
Description of Accounting Industry
Census Bureau). Massachusetts alone contributed to 2,144 of total establishments and $1,778,516 of received revenues (U.S. Census Bureau). Although there was little information about the accounting, tax return preparation, bookkeeping, and payroll services, Boston has a large financial and insurances service industry of 5,584 establishments.
5 Pages(1250 words)Essay
Convergence of Accounting Standards
So, these reports need to be meaningful, transparent and comparable in their content. Since 2001-2002, several US and other countries' corporate accounting scandals have shaken the confidence of the investors on the financial reporting process and it has reflected in the market value if corporate equity securities.
7 Pages(1750 words)Essay
Financial Reporting in the Face of Accounting Scandals
This has been highlighted by the numerous financial reporting scandals that have arisen lately that have had national and international repercussions. To understand the importance of this unique field, one needs to understand what financial reporting does.
11 Pages(2750 words)Essay
Diminishing Numbers of Accounting Majors: Suggested Causes
As Fedoryshyn and Tyson (2003) have indicated, the factors responsible for this decline are likely to be many and varied. One of the most alarming trends related to the reduction in accounting majors is the diminishing number of high school students who express interest in pursuing professions in accounting.
6 Pages(1500 words)Essay
Here we will be discussing one such scandal which rocked the world in October, 2001 – The Enron Scandal. The company was established in the year 1985 and quickly rose to become one of the major organizations. It became a very famous company and reigned all through the
2 Pages(500 words)Essay
Accounting Principles
Each of the business entities keeps principles of accounting in three ways; accounting, book keeping and auditing and all these are the basic principles lie
4 Pages(1000 words)Essay
What are the negative effects of accounting scandals on the government
In addition, this form of fraud can take a different dimension where an entity with vested interests may even manipulate a potential government business or procurement to get
1 Pages(250 words)Essay
Let us find you another Essay on topic American Accounting Scandals for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us