Accounting
... The following example will highlight the issue well: ENRON, with help from it’s accounting firm, ARTHUR ANDERSEN, was able to report stupendous growth and achieve unbelievable success. What the company did and the accounting firm ignored was as follows: Enron, the energy giant, set up partners by using its stocks. ... The accounting firm was involved in all these matters and this newsbreak wiped off the profession’s reputation worldwide. ... - Accounting Frauds 2. ... –Implications ACCOUNTING FRAUDS They are classified into five categories. They are as follows: (a) Aggressive Accounting It is intentional choice of material facts and application of accounting principles to achieve desired results. ... (d) Creative Accounting Practices It includes steps taken deliberately to play the financial numbers game. STRATEGIES ADOPTED (A) Aggressive Accounting: The companies try to choose that policy in reporting its financial statements which best serves the company’s interest and it justifies them with the accounting principles and conventions. ... In fact, very huge amounts of investment were systematically sprinkled across a series of accounting periods as Capital Expenditure. (D) Creative Accounting Practices: This is the art of accounting and different methods are used here. ... Enron’s share crashed from the price of $95 to less than $1 as soon as the news of accounting frauds hit the market.