Managers Use of FAS No. 115 for Investment Securities to Manipulate Earnings

Authors

Joseph B. Hillstead, Brigham Young University
Dr. Ted Christensen, Brigham Young University

Keywords

investment securities, manipulate earnings, FAS 115

College

Marriott School of Management

Department

Accountancy

Abstract

In the wake of catastrophic accounting scandals involving companies such as Enron, WorldCom, and Andersen, investors and the Securities and Exchange Commission have become increasingly concerned about the quality of reported earnings. Wall Street earnings expectations may be overriding common-sense business practices. In a zeal to satisfy consensus earnings estimates and project a smooth earnings path, wishful thinking may be winning the day over faithful financial representation. In this current era, gray-area accounting is sometimes misused; managers are cutting corners; and earnings reports reflect the desires of management rather than the underlying financial performance of the company.

Recommended Citation

Hillstead, Joseph B. and Christensen, Dr. Ted (2013) "Managers Use of FAS No. 115 for Investment Securities to Manipulate Earnings," Journal of Undergraduate Research: Vol. 2013: Iss. 1, Article 2403.
Available at: https://scholarsarchive.byu.edu/jur/vol2013/iss1/2403