The Relationship Between Accounting Responsibility Of Real Earnings Management

Accounting is used as a tools to inform investors and other stakeholders about management’s performance. However, accounting standards permits management to use judgment in financial reporting methods for some accounts as they have best knowledge of its business so it can choose accounting alternatives that suit their business. With ability to choose its preferable reporting methods, estimates and disclosure, this flexibility creates opportunity for managers to distort earnings in which they adopt

Q1 a) The earnings (net income) are considered as the most critical financial figure in the financial statements as it indicates the profitability of the company. All benefits for shareholders including both the capital gains and dividends are closely related with the earnings. In other words, the performance of the company and the management can be largely evaluated by the earnings figure. Due to the importance of earnings, it is not surprising the management is keen to improve the figure via

professional of the firm, it must be promote and engage in ethical conduct, including also handling in the ethical of conflicts between personal and professional relationships in interest, and to report to secretary office any information of transaction or any material that might give rise to such a conflict. Financial professional need to carry out the responsibilities and honest, due care and carefulness, always do the best independent judgment. Besides that, it also assist in the making of accurate

making process that targets real value creation for shareholders. The objective of this paper is the analysis of two articles of Stern Steward Research, namely “Accounting is Broken. Here’s How to fix it. A Radical Manifiesto” and “The capitalism Manifesto. The Transformation of the Corporation - Employee Capitalism –“. Both papers propose a roadmap to fix the conventional accounting shortness through the use of Value Based Management (VBM) as a real and effective management system of value creation

Gardiner Means. According to this thesis, the fundamental agency problem in modern firms is primarily due to the separation between finance and management. Modern firms are seen to suffer from separation of ownership and control and therefore are run by professional managers (agents) who cannot be held accountable by dispersed shareholders. This separation of ownership from management and the resulting loss of direct owner involvement in the firm forced many people to rethink the conventional wisdom about

members, what’s more, two-thirds of the members in the audit committees must be independent directors (non-executive directors), and every member in the audit committees should be financially literate and at least one of them has accounting or relative financial management expertise. SEBI also highlighted the Chairman of the Audit Committee should be an independent directors (non-executive directors). There are many researchers focused on the main point of effectiveness of audit committees

Literature Review Impression management In recent years, many of the studies of impression management are linked to accounting narratives. Dhanani and Connolly (2012) （r32）stated that the disclosure of the annual report could be seen as "the wrong organizational reality”. Thus, the quality of financial reporting becomes a growing concern because of the damage caused by impression management (Clarke and Dean, 2007). The chairman's report, which is considered to be widely read in these narratives

Is earnings management good or bad? Who (or which part of corporate governance mechanisms) is responsible to constrain earnings management? To what extent can the auditor constrain earnings management? Propose some methods for the auditors to detect and constrain earnings management. Does market react to firm's earnings management behavior? In order to discuss earnings management and what its affects are on business and whether or not it's a good thing, one must first understand what earnings management

financial accounting standards specifically designed to achieve neutrality. Yet, bias in financial reporting occurs, whether it is deliberately or unintentionally introduced. Various accounting and economic theories have been introduced to explain and predict the occurrence of biased accounting practices. Positive accounting theory (PAT) offers one such attempt to make accurate predictions regarding real world events as captured by accounting transactions and to explain why firms choose between various

Introduction The purpose of this study is to establish the relationship between environmental violations and CEOs’ annual bonus payouts. The study focuses on environmental violations such as permit violations, spills, court actions, and complaints. These violations often occur at the apex of corporate recognition when managerial acts suddenly occur together with significant gaps between perceived corporate social responsibility and actual environmental commitments. The violations occur when managers