Columbus Business Daily

Accounting Earnings Management Example?

I asked this question before, and no one addressed my actual question. What are company that used "earnings management," aka questionable practices, that may or may not have violated GAAP, and how did they do this? Also, this part is important, I DONT want enron or worldcom or anything that is going down right now. I know there are examples out there, I'm just having trouble finding them. Thanks!

Public Comments

1. There are a lot of areas that a company can make decisions that are Maybe questionable. There are set depreciation policies that can be stretched to give more depreciation or less. There are many ways to cost inventory. last in first out, first in first out, standard costs. All of those have an affect on the profits.Simple thing like not rolling standards which in a inflationary market would make profits lower. LIFO makes profits lower and FIFO makes profits higher in an inflationary market. Don't write off bad debt, don't recognize obsolete inventory, Move invoices to next year, Don't account for scrap.