Emerging Issues In Accounting Mohammmad
Emerging issues in Accounting
Below is the list of some of the emerging issues we have seen recently. These emerging issues have raised many questions on the functioning of accounting around the globe.
Continuing demand for skilled professionals
Globalization and International Financial Reporting Standards (IFRS)
The accountant and Corporate scandals.
The call for Auditor rotation.
Need for Global Code of ethics
Technology advances
We will discuss one of the emerging issues in details. We will try to understand what the issue was, why it happened and how it can be prevented in future.
The accountant and Corporate scandals.
Introduction:
Accounting fraud is a manipulation of company’s financial data so that the image of company looks better than actually is, this in turn will have a positive impact on the shareholders/stakeholders regarding the firm’s ability and will urge investors to invest more.
Recent Examples and ‘how can we minimize these incidents’
Recent accountant and corporate frauds have raised questions on the ability of independent auditors to uncover the financial fraud. Below are some of the frauds which have been reported in last 10 years.
We will see the magnitude of these frauds and then we will try to locate the pin point, which caused these frauds, how these frauds got caught and what can be done in future to prevent these happening or what can be done so that these frauds can be caught at early stage.
American International Group (AIG) Scandal (2005)
Company: Multinational Insurance Corporation.
What happened: Massive accounting fraud to the tune of $3.9 billion was alleged, along with bid-rigging and stock price manipulation.
Main player: CEO Hank Greenberg.
How he did it: Allegedly booked loans as revenue, steered clients to insurers with whom AIG had payoff agreements, and told traders to inflate AIG stock price.
How he got caught: SEC regulator investigations, possibly tipped off by a whistleblower.
Penalties: Settled with the SEC
Below is the list of some of the emerging issues we have seen recently. These emerging issues have raised many questions on the functioning of accounting around the globe.
Continuing demand for skilled professionals
Globalization and International Financial Reporting Standards (IFRS)
The accountant and Corporate scandals.
The call for Auditor rotation.
Need for Global Code of ethics
Technology advances
We will discuss one of the emerging issues in details. We will try to understand what the issue was, why it happened and how it can be prevented in future.
The accountant and Corporate scandals.
Introduction:
Accounting fraud is a manipulation of company’s financial data so that the image of company looks better than actually is, this in turn will have a positive impact on the shareholders/stakeholders regarding the firm’s ability and will urge investors to invest more.
Recent Examples and ‘how can we minimize these incidents’
Recent accountant and corporate frauds have raised questions on the ability of independent auditors to uncover the financial fraud. Below are some of the frauds which have been reported in last 10 years.
We will see the magnitude of these frauds and then we will try to locate the pin point, which caused these frauds, how these frauds got caught and what can be done in future to prevent these happening or what can be done so that these frauds can be caught at early stage.
American International Group (AIG) Scandal (2005)
Company: Multinational Insurance Corporation.
What happened: Massive accounting fraud to the tune of $3.9 billion was alleged, along with bid-rigging and stock price manipulation.
Main player: CEO Hank Greenberg.
How he did it: Allegedly booked loans as revenue, steered clients to insurers with whom AIG had payoff agreements, and told traders to inflate AIG stock price.
How he got caught: SEC regulator investigations, possibly tipped off by a whistleblower.
Penalties: Settled with the SEC
References: – 1) Firm details and data have been referenced from accounting-degree.org