Accounting

On September 28, 1998, Chairman of the U.S. Securities and Exchange Commission Arthur Levitt sounded the call to implements of war in the financial community. Levitt asked for, immediate and coordinated achieve... to assure credibleness and transparency of financial reporting. Levitts speech emphasized the importance of overtake financial reporting to those gathered at New York University. account which has bowed to the impels and tricks of earnings management. Levitt specifically addresses five of the most prevalent tricks used by firms to smooth earnings. Secondly, Levitt outlines an eight part action plan to recover the integrity of financial reporting in the U.S. market place. What are the basic objectives of financial reporting? mostly accepted accounting principles provide study that identifies, measures, and communicates financial schooling about economic entities to reasonably knowledgeable users. Information that is a source of decision making for a wide depart of users, most importantly, by investors and creditors. Investors and creditors who are responsible for effective allotment of capital in our economy. If financial reporting becomes obscure and indecipherable, association loses the benefits of effective capital allocation. Nothing illustrates the importance of transparent information better than the pre-1930s era of anything goes accounting. An era that left a chasm of misinformation in the market.



A chasm that was a contributing factor to the market knit of 1929 and the years of economic depression. An entire society suffered the repercussions of misinformation. Families, and retirees depend on the credibility of financial reporting for their futures and livelihoods. Levitt describes financial reporting as, a bond between the company and the investor which if damaged can subscribe disastrous, long-lasting consequences. Once again, the bond is being tested. Tested by a financial community fixated on consensus earnings estimates. The pressure to achieve consensus estimates has never been so intense. The market demands consistency...

If you want to feature a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .