Auditors’ Earnings Management Decisions Mark W. Nelson John A. Elliott Cornell University Robin L. Tarpley The George Washington University ABSTRACT: This paper reports analyses of data obtained using a field-based questionnaire in which 253 auditors from one Big 5 firm recalled and described 515 specific experiences they had with clients who they believe were attempting to manage earnings. This approach enables us to analyze separately managers’ decisions about how to attempt earnings management
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D’s Dang Cameras Jordan Beadle Esperanza Benitez David Dang Sean Kelly Thom Thurn Strategy Formulation and Initial Implementation Our company wanted to appeal to as many consumers as possible and gain market share through value and competitive cost. We realized that not every person would need an extremely high end camera to capture life’s simple moments‚ but consumers would still appreciate a high value product without the intimidating features of some highend cameras. We chose to
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IMPACT OF TAX CONSIDERATION AND TRANSITORY EARNINGS ON DIVIDEND INSIDE A FIRM. By ADARAMOLA A. O. (Ph.D.) ABSTRACT The purpose of this paper is to discuss the Dividend Relevance Theory and to determine whether a relationship exists between dividend payment and transitory earnings; given the impact of tax and other economic conditions with the objective of maximizing the present discounted value of after tax dividend. To achieve this‚ the Lintner’s models were specified to which the
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A1. Custom Snowboards is a company that uses financials to their benefit‚ they would naturally prepare a yearly budget and most likely a five-year budget with expected sales and costs‚ as well as the direction of the company and a growth plan. Custom Snowboards should clean up their financials before pursuing an expansion. A clean-up should begin well in advance to requesting funding for growth or expansion. One way to make the financials look better might be to care less inventory on-hand by
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Interest (16‚000) (1‚21‚000) Taxable Income 21‚84‚000 20‚79‚000 Less: Tax @ 30% (6‚55‚200) (6‚23‚700) EAT 15‚28‚800 14‚55‚300 Less: Dividend on Pref. Shares (20‚000) (20‚000) Earnings available for equity shares 15‚08‚800 14‚35‚300 Number of Equity Shares 90‚000 80‚000 EPS (`) 16.76 17.94 (ii) Equivalency level of Earnings between Equity & Debt [(X – `16‚000) (1 - 0.30)] – `20‚000 = (X – `16‚000 – `1‚05‚000) (1 - 0.30) – `20‚000 90‚000 80‚000 0.7X – `11‚200 – `20‚000 = 0.7X – `11‚200 – `73‚500 -
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1. Assume a company’s Income Statement for Year 12 is as follows: Income Statement Data Year 12 (in 000s) Net Revenues from Footwear Sales $ 280‚000 Cost of Pairs Sold 150‚000 Warehouse Expenses 15‚000 Marketing Expenses 35‚000 Administrative Expenses 8‚000 Operating Profit (Loss) 72‚000 Interest Income (expenses) (10‚000) Pre-tax Profit (Loss) 62‚000 Income Taxes 18‚600 Net Profit (Loss) $ 43‚400 Based on the above income statement data (assume interest income is zero)‚ the company’s interest
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Business description Custom Tailoring make men’s‚ women’s and children’s pants and shirts. The goal is to provide quality pants and shirts‚ and satisfy customers with design‚ size and price. Custom Tailoring is located at 1577 Atlantic Blvd‚ Neptune Beach‚ FL 32266. Custom Tailoring operates as a sole proprietorship. This form of business could have advantages to other forms of business because: • Custom Tailoring has fewer than 50 people • Manager can easily control the business and make
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The Warehouse Group Five Year Financial Analysis and Projection 2013 Business Report Executive Summary In the last two years The Warehouse Group (WHS) has looked to halt a decline in profits and revenue. The iconic brand fondly referred to as the Red Sheds by New Zealanders had hit rocky ground with a list of failed ventures (including Warehouse Australia)‚ a plummeting share price $8.50 in 2000 falling to $2.50 2012 (partly due to the global financial crisis)‚ falling operating
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financial crisis. With the exception of this slight dip‚ I would expect the growth of Kellogg Company to carry on from the next financial year along a similar trajectory that was experienced between 2005 2008. Operating profit Operating profit or Earnings before Interest and Tax (EBIT) is the profit from a firm’s core business operations. It does not include profit from a firm’s investment or the effects of interest and taxes. (Investopedia) Year | 2005 | 2006 | 2007 | 2008 | 2009 | Operating
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Routledge‚ CFA (212) 778-1501 CSX (46 1/2)—NYSE CRR (85 3/4)—NYSE CSX announces merger proposal with Conrail. Longer-term benefits balanced against near-term uncertainties. Lowered CSX rating to Hold given earnings dilution over the near-term. October 18‚ 1996 Earnings Per Share Fiscal Year Ending Shares P/E O/S Ind. 52Week 12/95 CSX 12/96E 12/97E 12/97E Div. Yield (Mil.) Range $3.46 $4.00 $4.25 10.9X $1.04 2.2% 212 53-41
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