Answered Essay: Just a Paragraph for the discussion

Just a Paragraph for the discussion

Imagine you are the controller of a major new tech start-up. Upper management is putting pressure on you to exceed Wall Street’s earnings expectations for the next quarter. You have decided that you have to “cook the books” in order to exceed expectations. Create a scheme to increase earnings for the quarter. Support your scheme with examples

Expert Answer

 

To increase net earnings, either revenues for the next quarter are to be overstated, or costs to be understated, or a combination of both needs to be resorted to.

Earnings management, an euphemism for cooking the books or financial manipulation, refers to managing any item in the financial statements in order to give the picture that the manage wants to portray. It can take various forms, and the spectrum may range from recording fictitious sales ( criminal ) to deferring some categories of expenditure, like advertising ( lawful).

To appear successful in the next quarter, you may want to increase income, increase the book value of assets and/or to decrease the book value of liabilities. Some methods that may be resorted to by management ( reproachable) to show higher earnings numbers are :

a. Lower the estimates for uncollectible debts, and keep bad debt expense to the minimum.

b. Do not recognise unearned revenues. Record all amounts received in the next quarter as revenues earned.

c. Recognize revenues for goods sent to distributors and consignment agents.

d. Do not record any accrued liabilities.

e. Leave contingent liabilities alone. They can be taken taken care of once the quarter has come and gone.

f. Defer depreciation charge on assets purchased during the next quarter.

g. Defer advertising expenses to the succeding quarter / quarters.

h. Reduce estimated warranty liability and warranty expense.

i. Restructure an operating lease as a capital lease, so that the operating costs are reduced.

j. If there in inflation, it could be prudent to switch from WAC to FIFO method of valuing inventories.

If all these

k. Stick with the straight line method of depreciation, and do not opt for the accelerated methods. Depreciation expense under the straight line method is lower than the accelerated methods during the earlier years of operation.

l. Raise the estimated useful lives of assets, so that quarterly depreciation charge is reduced.

Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?