Business Financial Crime Coursework Example | Topics and Well Written Essays - 2500 words

Business Financial Crime - Coursework ExampleThe paper analyzes the frauds associated in the earning management and cites or so cases of frauds in the earning management. A section of the paper also deals with the regulatory framework of earning management in countries exchangeable USA and UK.The concept of earning management drive out be defined under three board heads of white, desolate and Gray. White signifies the beneficial earnings which are used to enhance the transparency of the financial reports whereas black signifies the legerdemain of the report and involves fraudulent activities. The gray denotes the manipulation of financial reports which occurs within the boundaries of the compliance, which are done to enhance the dexterity or to provide opportunistic results. Under the gray concept, earning management involves the selection of accounting principles which helps to maximize the overall utility of the management of the organization. Earning management is initiated by the mangers when they use their judgment in the reporting of the financial relation and alters certain information within the reports for misleading the stake holders or to influence the outcome of certain contracts which depends on the stability of the organization in terms of accounting figures. However all earning management does not involves the refutal of the facts and figures. Certain organizations do not resolve to distortion of figures of the accounting report and allows the investors to distinguish between the unhomogeneous components and they only undertake operations which enhance the value of the information associated with the earnings of the organization. Earning management often proves to be beneficial in determining the long term value of the organization and at the same it can be pernicious while concealing the short term value. The concept of earning management is declared as fraud and it violates the rule specified by GAAP, when the organization records sal es in the accounting reports