Finance Discussion Question (Coursework Sample)

Finance Discussion Question
University Name
Course
Tutor Name
Date

Earning Manipulation
Earning manipulation is a negative business practice. The practice entails the act of deliberately changing the process of financial reporting for own gain (Badawi, 2008). Alteration of the process of reporting is done so to mislead other parties involved on performance of the business.
In the past, corporations such as Qwest International Inc. have been manipulated the earning to cover up previous problems, achieving internal targets, income smoothing and achieve external expectations.
Analysts would be concerned with information about earning management since they wish to know the company which have not achieved it targets, has a slow growth yet the company manipulated information to favor the deal.
Smooth earning is exhibited as an ethical practice by people. The justification for this statement is due to the fact that people are motivated with a growing organization. Stocks from that corporation ca be misleading since in the actual sense the company is not growing. Stocks from these companies do not gain value (Badawi, 2008).
2. Qwest international internal was found to be manipulated information concerning its earnings. Despite the report denoting the fraud, an investigation didn’t follow simply because the company agreed to heed to the required actions. Qwest Company said it would restate financial results for the year 2000, 2001 and 2002. The company also had mechanism to sells phone directories for $ 7.05 billion to cater for the gap in financial records.
Nachio compensation policy had a hand in the stipulated fraud. The compensation policy as outlined by the company was...