Capstone Research Project Paper Example | Topics and Well Written Essays - 2750 words

Capstone Project - Research Paper ExampleThe come with was exercising a section based compensation plan for its top executives comprising of stock options. These were also not reflected in the fiscal statements. The company is planning to enter into partnership for which it requires presenting monetary report to IFRS. Negative impact of the fraudulent activity on the company followed by recommendations to CFO The inventory write downs are often associated with various negative impacts on the organization. It negatively impacts the operating performance of the organizations. It has been seen that the extreme sales growth in companies lead to higher chances of experiencing afterlife inventory write down as compared to the moderate growing firms. The inventory is an important portion in the financial statement of any organization. The cost of goods sold contains inventory portion, which an organization sells during an accounting period. The inventory stands proscribed to be paramo unt for the business as it helps in the computation of the companys gross lucre indirectly. After the gross profit, the net income of the company is obtained by subtracting all the operating expenses from the gross profit figure. Thus, absent entire inventory value in the financial statement leads to misinterpretation of the growth profit as well as the net income of the company. Underestimation or overestimation of the cost of goods sold results in long differences in the profit figure as well. The manipulation in the financial statements may lead to some(prenominal) consequences. The company might manipulate its financial data in order to hide the actual financial performance. The financial statement of any organization reflects its financial information based on which the stock prices are changed. This information assists the investors in making their investing decisions. The GAAP reflects true and uninfected view related to the financial information of any particular company . But many times it has been seen that the figures in the financial statements bother manipulated by the managers of the organizations in such manner that it bears no resemblance with real performance of the company. This can also be termed as the creative accounting method. The manipulation in the real figures of the items presented in the financial statement has a negative impact on the stock prices in the financial market and due to which the values win deviated from the actual values. This displays a misleading picture for the market which in turn misleads the investors decisions. Many search studies in the past leave reflected positive abnormal returns because of the changes made in the actual earnings of the organization. The returns get altered depending on the validity of alteration in the total earning gained. If the accounting process is conducted in fair manner then this statement becomes highly profitable for an organization. But in case if manipulations or alteratio ns have been done on the actual earni