When a business committed accounting fraud, there are excessive pressure being applied to the management. Name some examples of such excessive pressure from.

March 11th, 2011 Comments off
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Excessive pressures on Management can come from the following: 

  • The need to achieve the targeted profitability or trend-level expectations of investment analysts, institutional investors, significant creditors or other external parties
  • Need to obtain additional debt or equity financing to stay competitive
  • Marginal ability to meet exchange listing requirements or debt repayment or other debt covenant requirements
  • Perceived or real adverse effects of reporting poor financial results on significant pending transactions such as business combinations or contract awards.

{ see article on aggressive accounting for revenue or aggressive revenue recognition }

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