Managers and Other Groups Interested in a Business Firm's Financial

question 89

Essay

Managers and other groups interested in a business firm's financial records must be able to "trust the numbers." Unfortunately, a large number of accounting scandals have caused people to doubt the numbers.Why do you think corporate executives "cook" their company's books?

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Definitions:

Unsecured Creditors

Creditors who have lent money without taking any collateral, meaning they have no specific claims on assets of the debtor in case of default.

Federal Crime

A violation of laws passed by the United States Congress and punishable by the federal government.

Conceals Assets

The act of hiding assets or property intentionally from creditors, courts, or other parties to avoid seizure or legal judgments.

Federal Tax Returns

Official documents filed with federal agencies to report income, calculate taxes owed, and document tax payments or refunds for a specified year.