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Winning Investors Over
book

Winning Investors Over

by Baruch Lev
October 2011
Beginner
384 pages
10h 17m
English
Harvard Business Review Press
Content preview from Winning Investors Over

Chapter 3

To Manage or Not to Manage Earnings?

Why You Shouldn’t Even Think of Manipulating Financial Information

In This Chapter

  • Surprise, there is no “truth” in accounting information.
  • GAAP to the rescue of truth, sort of.
  • Why do managers manipulate financial information and how do they do it?
  • The harsh consequences of manipulation for investors and managers.
  • Just don’t manipulate; there are better alternatives.

On September 12, 2007, the SEC charged former top executives of Nortel Networks, a Canadian telecommunications equipment maker, with accounting and reporting fraud aimed at beautifying reported earnings.1 Specifically, the SEC alleged that in 2002 Nortel executives created accounting reserves, in violation of GAAP, by artificially ...

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Publisher Resources

ISBN: 9781422142332