Manipulating Earnings Paper

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Manipulating Earnings With over twenty years of work experience I have witnessed managers at all levels utilize various tricks to manipulate short-term quarterly earnings. It seems like most managers have different views on what is ethical and unethical when it comes to managing short-term earnings and tend to use questionable practices to meet company numbers. This has been confirmed from The Dangerous Morality of Managing Earnings case study as according to Gibson the accounting practice of offering a fourth quarter sales incentive and allowing customers 120 days to pay in an attempt to increase fourth quarter sales numbers was posed to the managers in the case study and returned results indicating that the practice was viewed as ethical, …show more content…

It’s a wonder that anybody invests in businesses both big and small and public and private with managements ability to manipulate the earnings numbers in anyway they see fit. As an investor it would be nice to see earnings reports standardized and audited to prevent manipulation so that stakeholders have the information necessary to make informed decisions. A prime example of a company that manipulated and skewed its numbers for years was Qwest Communications with Joe Nacchio at the helm. I have friends and family that have worked at Qwest Communications for years and they lost significant amounts of money courtesy of Joe Nacchio who altered the books to show that the company was performing better than it really was and because of his actions the company’s stock nose dived when the fraud was …show more content…

After reading about some of the ways short-term earnings are manipulated and reading about the case brought against Qwest Communications Joe Nacchio I wonder if it would ever be possible for an honest person to head a giant corporation or would the pressure to satisfy Wall Street and the various share holders ultimately prevail by turning the honest person into a manipulator all for the sake of the numbers. I say let the cards fall where they fall and if a company has a bad quarter or a bad year so be it and if the company survives and makes a turn around you know that it is being done right. If everybody were to play by the same set of rules life would be so much

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