Financial Statement Fraud.Enron.AICPA

Worried how to value a dotcom company take their loss

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Unformatted text preview: easing stock prices, increasing profits With and increasing wealth for everyone, no one worried about potential problems. worried How to value a dot.com company: – – – – Take their loss for the year Multiply the result by negative 1 to make it positive Multiply that number by at least 100 If stock price is less than the result…buy; if not, buy If anyway anyway © 2003, 2005 by the AICPA Executive Incentives Executive Meeting Wall Street’s Expectations – Stock prices are tied to meeting Wall Street’s Stock earnings forecasts earnings – Focus is on short-term performance only – Companies are heavily punished for not meeting Companies forecasts forecasts – Executives have been endowed with hundreds of Executives millions of dollars worth of stock options—far exceeds compensation (tied to stock price) compensation – Performance is based on earnings & stock price © 2003, 2005 by the AICPA Incentives for F.S. Fraud Incentives Incentives to commit financial statement fraud are very strong....
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This document was uploaded on 03/29/2014.

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