1. Memo on "Earnings Management" Abuse Article
As the article indicates, "markets exist through the grace of investors." If investors are making their investment decisions based on the false and fraudulent information provided by corporations, the ideal of free, fair and global market would be lost forever. ... Management, whose compensation is tied to the stock price, tends to give way to the temptation to allegedly make up the numbers or get involved with insider trading. ... First, executive's compensation must be less tied to the stock option. Management who always concerned about the stock price can lose long-term vision of the c...
- Word Count: 514
- Approx Pages: 2
- Has Bibliography
- Grade Level: Undergraduate