Exam 7: Earnings Management and the Quality of Financial Reporting

Xerox leases met the criteria under SFAS No.13 to be accounted for as "sales-type" lease.What did Xerox's top management do that violated GAAP?

Which of the following is NOT addressed in the Waste Management's case?

Which of the following is NOT an earnings management technique?

Which of the following is NOT a technique used by Enron to manage earnings?

Which of the following is NOT true according to Enron's case?

Select either the Xerox or Lucent frauds described in the chapter and explain the accounting techniques used to commit fraud.

In surveys of managers, which technique to manage earnings was considered most acceptable?

Which of the following was not an accounting issue in the Sunbeam case?

Steve is quickly moving up in the accounting department of RAC Inc.It is yearend; he has just received news that the estimates of the estimated useful life and salvage values were wrong and must be changed.Of course, that changes the depreciation expense and accumulated depreciation.Steve calls his wife to explain why he will be late again.Now is he is pondering on a comment his wife made.She said "I'm no accountant; but after four years, you would think that the company could get done how its estimates affect expenses and those other accounts." What might the company be doing and what should Steve do from an ethical reasoning view?

Which of the following is NOT a motivation to manage earnings in the Lucent Technology case?

In the Xerox case, who was Xerox's auditor?

Vorhies identifies four perspectives to help CPAs identify key internal control exceptions under the Sarbanes Oxley Act including:

The legal issue in the Altris Software v PricewaterhouseCoopers case that failed to be proved by the plaintiffs was:

The amount and size of earnings restatements were relatively high in the early and mid-2000s.Explain the reasons that these instances were frequent and amounts high during that period of time.

What is the culture at Enron that is discussed in the case?

Which of the following is NOT an earnings management technique?

Discuss all the factors an auditor should consider in making a materiality judgment.

Many of the cases discussed in the chapter address the issue of swap transactions.What is a swap transaction? What criteria should be used to determine how and when to record revenue on swap transactions? Describe the facts of any one case in the book with respect to proper recording for revenue in swap transactions.

Explain when earnings management may be an ethical practice.

The expression, "Too many corporate managers, auditors, and analysts are participants in a game of nods and winks" is attributable to: