Continued action on earnings management, materiality, and more

✍ Scribed by Rouse, Robert W.

• Book ID: 101225568
• Publisher: John Wiley and Sons
• Year: 2000
• Tongue: English
• Weight: 63 KB
• Volume: 11
• Category: Article
• ISSN: 1044-8136
• DOI: 10.1002/(sici)1097-0053(200001/02)11:2<91::aid-jcaf15>3.0.co;2-7

✦ Synopsis

The three most important topics of concern to the Commission have remained virtually the same over the last 12 monthsÑearnings management, earnings management, and let's not forget, earnings management.

Chairman Levitt's "The Numbers Game" speech of September 28, 1998, sent shock waves through financial reporting community. Levitt presented preparers and auditors with the results of traveling down the earnings management road: "big bath" restructuring charges; creative acquisition accounting, including inprocess research and development costs; immaterial misapplications of accounting principles; and premature recognition of revenue.