Tread Lightly Through These Accounting Minefields  

Oleh:

Young, S. David ; Sherman, H. David

Jenis: Article from Bulletin/Magazine - ilmiah internasional
Dalam koleksi: Harvard Business Review bisa di lihat di link (http://web.b.ebscohost.com/ehost/command/detail?sid=f227f0b4-7315-44a4-a7f7-a7cd8cbad80b%40sessionmgr114&vid=12&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&jid=HBR) vol. 79 no. 7 (2001), page 129-147.
Topik: ACCOUNTING; accounting; accounting policies; accounting procedures; derivatives; earnings; ethics; financial reporting; fraud

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: HH10.17 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

In the current economic climate, there is tremendous pressure - and personal incentive for managers - to report sales growth and meet investors' revenue expectations. As a result, more companies have issued misleading financial reports, according to the SEC, especially involving game playing around earnings. But it's shareholders who suffer from aggressive accounting strategies ; they don't get a true sense of the financial health of the company, and when problems come to light, the shares they're holding can plummet in value. How can investors and their representatives on corporate boards spot trouble before it blows up in their faces ? According to the authors, they should keep their eyes peeled for common abuses in six areas : revenue measurement and recognition, provisions and reserves for uncertain future costs, asset valuation, derivatives, related party transactions, and information used for benchmarking performance. This article examines the hazards of each accounting minefield, using examples like Metallgesellschaft, Xerox, MicroStrategy, and Lernout & Hauspie. It also provides a set of questions to ask to determine where a company's accounting practices might be overly aggressive. These questions are the first line of defense against creative accounting. The authors argue that members of corporate boards need to be financially literate.

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