...pressures that lead executives and managers to "cook the books"? The CEO and CFO of WorldCom wanted to “cook the books” because they wanted to keep the company’s stock price growing. Managers and accountants “cook the books” because they are forced to do so by their CEO and CFO. WolrldCom CEO Ebbers believed that increasing the stock price is their number one priority, so he set up a goal for the corporation--“The goal of WorldCom is to be the No.1 stock price on Wall Street”. In the 1990s, WorldCom built their revenues quickly by acquiring other companies. That’s how they do to meet their expected growth. However, when they tried to merger Spring, they were blocked by the Justice Department. When they failed to expand their company by merging other companies, the executive team got lost and not sure how to expand the company in a legal way. As a result, WorldCom’s revenue growth slowed. At the same time, the Dot-com bubble started to burse, so the revenue for the whole telecommunication industry begun to decrease. However, Ebbers wanted to remain the same Expense-to-Revenue Ratio to ensure stock price moving in favorable direction. Which was impossible at that time for WorldCom to fulfill without making the number up. Therefore, the executives decided to “cook the book” to increase the stock price and meet their goal by making the false entries. For the accountant, they are pressured to “cook the book” because they are forced to do so. WorldCom encouraged...
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...Sarah Murphy Dana Underwood Reading Question 1 Section 119 Question 1: The book Messages was written to inform readers on how to better communicate with those around them. The observable elements of communication that are the focus of the book are basic communication and social skills. The basic communication skills that the book focuses on are listening, self-disclosure, and expressing. The social skills that are concentrated on are prejudgment and making contact. The main issues that the book addresses are the problems humans have while communicating with one another. The social problem the book tries to resolve is that people do not take the time to recognize their errors while communicating. The authors of Messages believe that communication requires discipline in order to be achieved successfully. If individuals become aware of their flaws, they can better influence society. Readers become aware that they cannot influence others through the use threats, belittling, or pouting (McKay, Davis, & Fanning, 2009, p. 286). The view the book takes on is that of the single contingency, which states that sending and receiving messages is what successful communication depends on (Habashi, 2013). In doing so, Messages highlights the consequences of not communicating effectively. Individuals who lack communication and social skills will have a harder time connecting with others. Not only does Messages view communication as a means to happiness, but it also holds humans...
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...| Review of Comcast Corp Annual Report 2012 | | | Review of Comcast Corp Annual Report 2012 | | Comcast Devry university October 13, 2013 Authored by: Traci Rood Comcast Devry university October 13, 2013 Authored by: Traci Rood TABLE OF CONTENTS INTRODUCTION…………………………………………………………2 QUESTION 1………………………………………………………………3 QUESTION 2………………………………………………………………4 QUESTION 3………………………………………………………………4 QUESTION 4………………………………………………………………5 QUESTION 5………………………………………………………………6 QUESTION 6………………………………………………………………6 QUESTION 7………………………………………………………………7 QUESTION 8………………………………………………………………7 QUESTION 9………………………………………………………………8 CONCLUSION…………………………………………………………….9 WORKS CITIED………………………………………………………….10 INTRODUCTION Comcast is a corporation dealing in global media and technology. They are made up of two primary businesses, Comcast and NBCUniversal. Comcast was originally founded in 1963 and then incorporated in 2001 in the state of Pennsylvania. The acquisition of AT&T Broadband put the now CEO, Brian Robert’s name on the map, at least in the cable industry.¹ NBCUniversal was acquired in 2011. They operate under five different segments; Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks.² The combined companies total 129,000 employees. Comcast has led the pack when it comes to cable operations. Especially in the last ten quarters. Their average operating cash flow growth has been 6.8%...
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...Business, Stanford University, and Center for Finance and Accounting Research at UNC-Chapel Hill, Stanford GSB Faculty Trust, and the Bank of America Research Fellowship. Corresponding author: William H. Beaver, Graduate School of Business, Stanford University, 518 Memorial Way, Stanford, CA 94305-5015, (650) 723-4409, fbeaver@leland.stanford.edu The Relevance of the Value Relevance Literature For Financial Accounting Standard Setting: Another View Abstract This paper explains that value relevance research assesses how well accounting amounts reflect information used by equity investors, and provides insights into questions of interest to standard setters. A primary focus of financial statements is equity investment. Other uses of financial statement information, such as contracting, do not diminish the importance of value relevance research. Value relevance questions can be addressed using extant valuation models. Value relevance studies address econometric issues that otherwise could limit inferences, and can accommodate and be used to study the implications of accounting conservatism. 1. Introduction This paper offers a view of the relevance of value relevance research for financial accounting standard setting that contrasts...
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...testing effective? What are the difficulties? Do we need all of these disclosures? What are some of the alternatives? We have three unanswered questions A call to action Appendix 1: The interviewees Appendix 2: References and notes Acknowledgements © 2014 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. Who cares about goodwill impairment? | 1 TIME TO ENGAGE On 30 January 2014, the IASB launched the public phase of its post-implementation review of business combinations accounting when it released a Request for Information.1 We believe that a key aspect of the review is the impairment-only accounting model for goodwill, which was introduced in 2004. Comments are due to the IASB by 30 May 2014, so now is the time for all stakeholders to provide their feedback on this emotive topic. The Request for Information essentially asks three questions in relation to goodwill impairment testing. • How useful have you found the information obtained from annually assessing goodwill for impairment? • Do you think that improvements are needed regarding the information provided by the impairment test? • What are the main implementation, auditing or enforcement challenges in testing goodwill for impairment? With this in mind, we interviewed a sample of stakeholders to find out what they think about goodwill impairment testing – its relevance, its effectiveness, the difficulties and the disclosures. This report is not, and was not designed to be, a statistical survey...
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...confidence, and carry out the responsibility of self-governance (www.aicpa.org, 2011). All CPAs must exercise a level of integrity showing they are exercising due care with all responsibilities. CPAs must practice objectivity by being impartial, honest, and free of conflicts of interest. A CPA must also make certain that any relationship they have with clients would not impair the objectivity while completing attestation services, therefore maintaining independence (www.aicpa.org, 2011). Review versus Audit A review and audit both look at the data provided in a company’s financials. The main difference between the two is how in depth the information is looked at. A review is completed by looking at a client’s internal data and asking questions of employees and management. A review usually does not include contacting the client’s bank or vendors or customers or other outside sources to verify closing balances and other information, unless the CPA feels it is absolutely necessary. A review does not provide as high of a level of assurance...
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...Contents Preface .................................................................................................................................. 2 2. MEDOC VERSION 1.0 .................................................................................................... 4 2.1 Introduction ................................................................................................................. 4 2.2 Outline......................................................................................................................... 5 3. Composing the Project Group............................................................................................ 6 4. What: Specifying the Collection ........................................................................................ 7 4.1 Introduction ................................................................................................................. 7 4.2 Subject ........................................................................................................................ 7 4.3 Character and extent .................................................................................................... 7 4.4. Information about the collection ................................................................................. 8 4.5 Results......................................................................................................................... 8 5. Why: Reasons for Digitising and Disclosing the Collection...
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...Chapter 3 AN INTRODUCTION TO CONSOLIDATED FINANCIAL STATEMENTS Chapter Outline A BUSINESS COMBINATION UNDER GAAP INCLUDES COMBINATIONS IN WHICH ONE OR MORE COMPANIES BECOME SUBSIDIARIES OF A PARENT CORPORATION. A A corporation that holds a majority interest (over 50%) of the voting stock of another corporation is referred to as the parent company. B The interest not held by the parent company is referred to as the noncontrolling interest. C A corporation whose outstanding voting stock is over 50% owned by another corporation is a subsidiary of that corporation. D GAAP states that the acquisition of additional shares of a subsidiary is recorded by an increase in the investment account and a reduction of the noncontrolling interest, based on the carrying amount of the noncontrolling interest at the additional acquisition date. APIC is adjusted for any difference between the price and the carrying amount. E The parent company and subsidiary exist as separate legal entities and maintain separate accounting records. However, each reporting period their separate accounting records are combined into one set of consolidated financial statements for reporting the financial position and results of operations of a consolidated reporting entity. 1 Consolidated financial statements are prepared for all the companies under the control of a single management team to reflect a single reporting entity with multiple divisions. 2 The purpose of consolidated...
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...5 The Balance Sheet and Financial Disclosures CHAPTER LEARNING OBJECTIVES OVERVIEW LO1 LO2 LO3 LO4 LO5 Chapter 1 stressed the importance of the financial statements in helping investors and creditors predict future cash flows. The balance sheet, along with accompanying disclosures, proAfter studying this chapter, vides relevant information useful not only in helping you should be able to: investors and creditors predict future cash flows Describe the purpose of the balance but also in the related assessments of liquidity sheet and understand its usefulness and limitations. and long-term solvency. Distinguish between current and noncurrent The purpose of this chapter is to provide assets and liabilities. Identify and describe the various balance sheet an overview of the balance sheet and asset classifications. notes to the financial statements and to Identify and describe the two balance sheet liability classifications. explore how this information is used by Explain the purpose of financial statement decision makers. disclosures. LO6 Explain the purpose of the management discussion and analysis disclosure. LO7 Explain the purpose of an audit and describe the content of the audit report. LO8 Identify and calculate the common liquidity and financing ratios used to assess risk. FINANCIAL REPORTING CASE What’s It Worth? “I can’t believe it. Why don’t you accountants prepare financial statements that are relevant...
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...Chapter 8 Discussion Question #3, #5, and #11 3. The purchase method is used when one entity acquires another, whereas the pooling method accounts for the uniting of the ownership interests of two (or more) entities. The pooling-of-interest method provides distinct advantages to many firms entering into a business combination. The assets and liabilities of both parties are combined at book value and revenues and expenses are combined retroactively. With the purchase method, the assets and liabilities of the acquired firm are adjusted to fair value; its reacquisition revenues and expenses are excluded from the combined income statement .In effect, the acquiree's books as of the date of the business combination are treated as if it were the end of its fiscal year, even though it may not be .For pooling accounting, however, the combinee's results of operations prior to the date of acquisition are included in the combiner’s results of operations as if the combination took place at the beginning of the year. The future earnings of pooling companies tend to be higher than those of purchase companies, primarily because of additional depreciation and goodwill amortization. Because of the possibility of abuse, the APB placed tight restrictions on the use of the pooling method by requiring compliance with twelve criteria. Perhaps the most important (and difficult) of these requires that a company exchange a portion of its shares for at least 90 percent...
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...Article Review For this assignment it is required that you acquire a research article from a peer reviewed journal and critique the contents of the article. Use the five general guidelines from the text book in your review and analysis of the article (listed below). In typing up the review please do not simply go through each of the questions listed below and give a response. It should read similar to a book review. You may find that in the article you are reviewing not every question will apply and you do not need to answer every question listed but do be as comprehensive as possible in your review. Remember the focus is on strengths and weaknesses of the article. The following reference is the first article you should review. A Comparison of CBT and EMDR for Sexually-abused Iranian Girls. Jaberghaderi, Nasrin; Greenwald, Ricky; Rubin, Allen; Clinical Psychology & Psychotherapy, Vol 11(5), Sep-Oct 2004. pp. 358-368. [Original Journal Article] I. Preliminary Analysis of an Article 1. What are the author’s credentials and institutional affiliation? 2. Has the author’s work been cited by others? 3. Is the publication current or dated? 4. Is the work published by a publisher of professional books or journals? 5. Is the work peer reviewed? 6. Is the source a scholarly journal? II. The Introduction 7. Has relevant research been adequately reviewed? 8. Are assertions supported with the appropriate citations? 9. Are the purposes...
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...Protection to Bankers from disclosure of certain information to public Banking is one of the most risky sectors as far as privacy is concerned due to the highly sensitive and personal nature of information which is often exchanged, recorded and retained. Although India has RBI guidelines and legislations to protect data, this blog post looks at the extent of those protections, and what are the areas that still need to be addressed. Introduction Banking is one of the most at risk sectors for privacy violations due to the sensitive, and highly personal nature of information that is exchanged, recorded, and retained. Individuals must trust banks with personal identifying information, their financial records, the access information to their accounts, and their credit history. Thus, privacy violations are not taken lightly and heavily impact the individual whose privacy was violated. Ways in which a violation of privacy can take place in the banking sector include: sharing personal information with third parties without consent for marketing purposes, stolen or lost banking number or card, sharing personal information or allowing access to third parties without informed consent, inadequate notification to an individual concerning what will be done with their data, collecting more personal data than is necessary, refusal to provide financial records upon request by client, incorrectly recording personal information, and loss of a clients personal data due to improper security...
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...activities would include, for example, acquiring debt, capital leases, issuing bonds, or issuing preferred or common stock. Financing activities would also include payments to retire debt, reacquiring stock (treasury stock), and the payment of dividends. 17-2. When auditing the investing and financing cycles auditors typically address the following issues: • What assets are necessary to support the operations of the entity, and what are management’s long-range plans for growing the entity’s asset base? Answering this question assists the auditor in developing expectations of long-term assets needed to support operations. • What assets were acquired, or disposed of, during the period? Answering this question confirms the auditor’s expectations regarding assets needed to operate effectively. It also assists the auditor in developing expectations of regarding financing activities. • How were newly acquired assets financed? Answering this question completes the audit of the investing and financing cycles. These cycles are often audited together due to the strong connection between asset acquisition and the financing of those assets. 17-3. Investing activities are critical to a company in the hotel industry as facilities are the primary productive asset. The location and quality of hotel...
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...10-K report they noted, under related party, that they paid out over 30 million to its shareholders, which are primarily family members. The question that this paper will answer is whether or not their disclosure was justified. Conducting Financial Reporting Research: Related Party Matters Through the years 1980 and 2000 their was a plethora of embezzlement going on within huge companies, Enron being the big one. With all these white collar crimes going on, it is hard to keep track of them. There was one scam that doesn’t get the acknowledgment it deserves. Adelphia Corporation and the Rigas family started out as a small communications company in 1952 that went public in 1986. Mainly dealing with cable television, the family owned company became the 6th largest provider in the country. Despite all of its success, in 2002 the company filed for bankruptcy after it disclosed 2.3 billion in off balance sheet debt (Revsine, L., Collins, D., Johnson, W., Mittelstaedt, H., & Soffer, L. 2015). When the problem was investigated further is showed that the Rigases were spreading around money to family owned entities like luxury condominiums in downtown New York. The question arises of whether their related party disclosure had any truth to it. FASB has been hard at work to set parameters to 10-K reports. Under topic 850 in their “rule book” they state, along with other things, that related party transactions may include a family owned entity (IAS Plus ASC 850. 2014). So under...
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...|Topic in Mastery of the |Chapter 3 - Building Your |Chapter 4 – Brain Teasers: Using|Chapter 5 – Cases to Accompany | |Financial Accounting Research |Business Vocabulary: Defining |FARS to Untangle the Mystery |FARS [Related Assignments at End| |System (FARS) Through Cases 2nd |Terms and Solving Problems |[See Introduction and Example |of Cases] | |Edition by Wallace [Chapter 1 |Through FARS [See Introduction |pp. 4-1 to 4-7] | | |and 2 where noted] |and Example pp. 3-1 to 3-7] | | | |FASB, Standard Setting; GAAP; |Table 3.1 Accounting Standards; |1: How Many Standards Have Been |Case 12: Emerging Issues: The | |Governance; FARS [Chapter 1 – |Table 3.39 Regulated Industry; |Issued by FASB?; 2: Dissents |Agenda of FASB; [Case 8 Related:| |The Financial Accounting |Table 3.40 Specialized Industry |Portending Future?; 32: What |Does It Matter Where Guidance Is| |Research System (FARS) Primer.] |Considerations |Makes One GAAP Preferable to |Located?]; [Case 12 Related: Are| | | |Another?; 30: When Can Analogies|Accounting Rules to Blame?] | | | |Be Used?; 31: What Are the 10 | | | ...
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