Question

Provide an analysis of potential financial shenanigans and propose potential adjustments.

Answer 1

Potential financial shenanigans will be including all such acts which are intended to manipulate the books of accounts by a small margin or a large margin and provide rosy picture to the investors and creditors so that they would be willing to provide them with financings and it will also offer chance for management to secure their jobs.

Financial shenanigansare all such fraudulent activities which are designed in order to manipulate and hide the true and fair representation of the financial statements of an entity.

when it is revealed in the market that company's performance has been due to financial shenanigans, it will be having a very negative implication in the stock price and the growth rates and other future prospects because it will be discounted by the investor that company has engaged into serious thoughts and it is not representative of a true books of accounts.

Financial shenanigans will be including fraudulent accounting fraudulent acts of hiding the losses of the company and it will also be trying to engage itself into stealing the data.

Potential adjustment for these financial shenanigans will be that there should be a proper adoption of financial accounting and there should be a proper accounting standard which should be followed into the books of accounts and their should be write back of all these inflated figures which has been a result of financial shenanigans and it should be disclosed in the public and the shareholders that entity has been thriving upon financial shenanigans, so that this share holders and investors can protect their interest and the company should be trying to change the management and should be trying to adopt with the proper accounting practices and policies along with international standards so that they could maintain a true and fair books of accounts.