ACCOUNTING IRREGULARITY

Accounting Irregularity Analysis & Presentation

Accounting Irregularity Analysis & Presentation

Introduction

Accounting irregularity refers to the intentional misstatement or amount omissions or disclosure in financial statement of company. The accounting irregularity comprises of fraudulent in financial reporting, hence misleading and misappropriation of assets. Moreover, it also includes manipulation, falsification, and alternation of accounting records or any document which support the financial statement transaction. We will prepare an effective and efficient accounting research paper which will have a thorough analysis of the Accounting Irregularity issues, facts, and authoritative rules, statements, or regulations on Samsung and for Comparison Blackberry and Nokia Company.

Discussion

Issues

The issues which has been identify in the financial statement of these three companies (Samsung, Blackberry and Nokia) are as followed:

Overstatement of income in the financial statements: this is the section where companies mostly make intentional mistake through artificially increasing the sales, account receivables, inventory, moreover improper accounting entries that cause earnings to be overstated (www.nzfc.ac.nz/).

Expenses and Accounts-Payable to be Understatement: companies usually decrease their expense in order to show high income in the income statement and also lower expense and payables indicate that company is performing well. Hence, along with these companies also how their contract cost to be undervalue. The reason to do this is to increase the reputation of the company in the market as this will increase the share price of the company (Kwok, 2005).

Recognition of improper Revenue is a way which is used by the company to manipulate revenue. The company do this to attract the investor as high revenue indicates high return to the investor in form of dividends. Like, majority of the companies' shows premature recognition of sales, receivables, recognition of profits on derivatives transactions. Differentiation in time is also a form of manipulation. These companies in overstated their earnings through this method.

Rule

U.S. GAAP (Generally Accepted Accounting Principles) is the accounting principles generally accepted and used by companies based in the United States or traded on Wall Street. They cover a massive volume of standards, interpretations, opinions, and newsletters are produced by the FASB (Directory of Financial Accounting Standards), the accounting profession AICPA and the SEC (Securities and Exchange Commission). In this above mention issues the following rules will be applied.

The first principle which should be applied in the first issue is the principle of sincerity which state that financial accounting statement should represents the real financial status of the company along with ...