Hello I have two thisgs have to be done in this work.
First
Please discuss following topics:
1.In recent years publicly traded companies are under pressure to meet or beat the analysts consensus earnings estimates in their quarterly reports because the market will punishthose that fail to deliver expected earnings.Thusmanagers tend to utilize a number of methods to improve reported profitability that are cosmetic in nature and do not affect real operating performance to meet the market expectations. These methods are referred as earnings management (commonly called cooking the books). Managers have different motivations to engage in earnings management and they usually defend their actions including following arguments:
(1)Increasing stock price by managing earnings benefits stockholders; no one is hurt by these actions
(2)Earnings management is a temporary fix; such actions will be curtailed once real profitability improves as managers expect.
So what are the affected parties in schemes above to manage profits to prop up stock price? Do the ends of earnings management justify the means? Whatgovernance structure you think to curbearnings management and increase the reporting quality?Please discuss.
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2.According toWall Street Journal(See the attached under Reading Assignment)General Motors agreed to pay a $1 million penalty because it was alleged that the company failed to alert its accountants about a defective ignition switch in a timely manner. This example points to the power of the legal and regulatory community to exert fines on all aspects of decision making within the organization.Do you think GM has been unfairly targeted for failing to alert its accountants about potential financial losses when this information was widely available in the news media? Is it easier for GM to pay the fine than to engage in litigation to defend its position when it feels it had not engaged in wrongdoing? Please Discuss.
This assessment fulfills the following course objective(s):
Second
Please see attached to find the questions for this week’s written assignment. Pleasehave your detailed solution when you submit it.
This assessment fulfills the following course objective(s):