Essay about the Revenue Manipulation

Question: Write an essay about the Revenue Manipulation. Answer: The issue involved in the case given is the case of the revenue management. In this, one of the ways of smoothing of the things or the reported earnings is undertaken by the help of manipulation of the real transactions. This could be achieved by the way of cutting down the discretionary costs such as that of the expenses like the advertising and the research and development. It is also true that there are many of the real problems for the companies such as the lesser amounts of the sales during the subsequent periods or the loss of the economic opportunities that results from the cutbacks in the discretionary spending (Revenue recognition, 2016). The revenue management is something that when it comes to the expenses, the companies understate the income statement so that there is an increased amount of the net income in the books of accounts. This is achieved through the deferring of the expenditures so as to include the expenses that occurs in the current year and wherein the firm can prop up the profits. These are the deferred expenses that includes the payments that have been made but will not be reported as an expense till the future period of accounting. The same is reported in the balance sheet till the asset expires. There are many of the expenses that are required to be charged to the statement of income. There are many of the companies that ignore the stated requirement and also helps in the capitalisation of the normal operating expense such as the assets and also helps in the amortisation of the stated expenses over the period of time. This helps in the reduction of the various expenses and gives a false impression of the improved earnings (Economic times, 2016). Many organizations considers the measures of accounting for the measurement to pay that frequently contents with the variety of different ad undesirable and unethical behaviours. The business press helps in the repleting with the stories about as to how the employees that are engaged in the dysfunctional and questionable ethical behaviours that are illegal in nature (Proformative, 2016). This helps in making themselves to look better on the evaluation of the performances and for the purposes of obtaining the bonuses. These are the behaviours that generally leads to the bias of the information or tin the co-ordination of the various activities to the game in the realisation of the various budgets or in the timing of the reported or the actual economic events for the purposes of shifting between the periods which is also termed as the earnings management (Walker, 2016). Ethical dilemma: In the given case, Susan wants to increase the profitability base so that an increased amount of the profit could be reported in the books of accounts she attempts to comply with this with the help of allocation of the base of the maintenance costs. This would lead to decrease in the amounts of the expenses and will show a higher amount of the profits. This is technically wrong and in fact is also ethically wrong (Academic, 2016). Larry on the other hand thinks that what she was asking him to do was wrong and did not comply with the same. Hence, he resigned but what he did was not right since he should have brought the above stated fact to light. The ethics involved in the stated is that of the earnings management or the manipulation of the earnings. Stakeholders: The stakeholders in this given case is the shareholders, the management of the company. Alternatives available to Larry: Instead of resigning, Larry should have brought these facts into light in front of these shareholders. Reason for choosing other alternatives: Resigning just because of a disagreement is never an option, he should have taken the above stated step. Conclusion: Larry should not have resigned. He should have brought the various things stated above in light in front of the management and the various other stakeholders. References: Academia.edu. (2016).Do Governments Manipulate Their Revenue Forecasts? Budget Speech and Budget Outcomes in the Canadian Provinces. Altamuro, J., Beatty, A. and Weber, J. (n.d.). Motives for Early Revenue Recognition: Evidence from SEC Staff Accounting Bulletin (SAB) 101. timesofindia-economictimes. (2007).How companies fudge figures to dress up their accounts. Walker, K. and Fleischman, G. (2013). Toeing the Line: The Ethics of Manipulating Budgets and Earnings.