Earnings Mgt. and Fraud Discussion Questions and Minicases

Earnings Mgt. and Fraud Discussion Questions and Minicases...

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GB112 Earnings Management and Fraud Discussion Questions and Minicases A. Discussion questions from the assigned readings: 1. “Earnings Management: Good, Bad or Downright Ugly?” -Define earnings management and give some examples. Earnings management is arranging matters to achieve a predetermined result. -Why do companies manage earnings? Companies manage earnings in order to reach the results they have an incentive to report and because there is nothing to test the numbers against. 2. “Assessing Fraud Risk,” -According to the article, what are three categories of fraud exposure? Asset misappropriation, corruption and fraudulent financial statements -How do internal controls lessen the risk of fraud? Give specific examples from the article. Internal controls prevent people from having too much access to one category and thus prevents them from being able to hide their illegal actions. Someone who is using company resources to sell a personal product can be stopped by internal controls if they are forced to disclose outside business interests. 3.
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Earnings Mgt. and Fraud Discussion Questions and Minicases...

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