Earnings Management, in Exchange Listed Companies, Is Not...

INTERNATIONAL UNIVERSITY COLLEGE Sofia â€Å"Earnings management, in exchange listed companies, is not fraud but a case of caveat emptor for investors† Coursework in BUSINESS FINANCIAL CRIME Student registration No: 479866 Program: International Finance and Trade, Level 2 Lecturer: A. Paparizov â€Å"Earnings management, in exchange listed companies, is not fraud but a case of caveat emptor for investors† With the development of the stock markets and the huge grow in the volume of money traded in them, over the past 20 years a rising attention has been aimed at towards the importance of truthful and fair accounting. The real interest in how companies chase their financial reporting has developed in the wake of a multitude of large†¦show more content†¦We already mentioned that earning management happens in the world and is very common practice nowadays, not only in big worldwide corporations, but also in not so big national companies looking for high accounting numbers, that will help them reach additional bank loans easily. But, is the earning management policy practiced by the firms, affects the stock prices and investors decisions. The investment or in other words â€Å"speculation† decisions most of the times depend on expectations of the future movement of the specific stock. In other words, the majority of non professional investors or speculators decide to b uy or sell a certain stock on basis on their expectation rather than what is stated in most of books, â€Å"what they are ready to pay for it, based on their â€Å"sophisticated† analysis†. For example, if investors see that a company X has reported a 20% growth this year, or became number one in a specific sector, then the investors presentiment became bullish, creating a good environment for a significant growth due to speculators expectation. For example let us take the case of Enron – one of the biggest US companies in early 2000’s. Enron was leading company in electricity, communication, pulp, paper and natural gas sphere. In 2000 Enron Corporation reported nearly $101 billion. According to BBC site, â€Å" it was the first to realize energy and water could beShow MoreRelatedMba Solved Assignment Papers52670 Words   |  211 Pagesevents and environments what you want to gain by your research, the more effective and efficient you can be  in your research, the shorter the time it will take you and ultimately the less it will cost you. Manager’s role in research programs of  a company: Managing people is only a fraction of a manager s responsibility - they have to manage the operations of  the department,  and often  have responsibilities towards the  profitability  of  the organization. Knowledge of research can be very helpful  forRead MoreIca Gh Syslabus26672 Words   |  107 PagesPerformance Outcomes of Each Part PART 1 1.1 1.2 1.3 1.4 Financial Accounting Fundermentals Business Management Economics Management Information Systems PART 2 2.1 2.2 2.3 2.4 Quantitative Tools in Business Audit and Internal Review Business and Corporate Law Principles and Practice of Taxation PART 3 3.1 3.2 3.3 3.4 Financial Reporting Public Sector Accounting Cost and Management Accounting Financial Management PART 4 4.1 4.2 4.3 4.4 Advanced Financial Reporting Advanced Audit and Professional Ethics CorporateRead MoreStephen P. Robbins Timothy A. Judge (2011) Organizational Behaviour 15th Edition New Jersey: Prentice Hall393164 Words   |  1573 PagesCover Designer: Wanda Espana OB Poll Graphics: Electra Graphics Cover Art: honey comb and a bee working / Shutterstock / LilKar Sr. Media Project Manager, Editorial: Denise Vaughn Media Project Manager, Production: Lisa Rinaldi Full-Service Project Management: Christian Holdener, S4Carlisle Publishing Services Composition: S4Carlisle Publishing Services Printer/Binder: Courier/Kendallville Cover Printer: Courier/Kendalville Text Font: 10.5/12 ITC New Baskerville Std Credits and acknowledgments borrowed