Current events in business affecting financial reporting or
performance measurements are tied to financial measurements. Provide the URL of
a short article online and describe how the company you researched is affected
by its financial reporting issue.
200-300 words. APA formatted.
Original work as it will be checked before final payment.
Please do not use any of the following companies.
Norris, F. (2011, December 8). Deep
Roots Of Fraud At Olympus. The New York Times. Retrieved May 8, 2014,
Dell SEC. (2010). SEC Charges
Dell and Senior Executives with Disclosure and Accounting Fraud. US Securities
and Exchange Commission. Retrieved from
The Postal Service spins its Q3 financial report. (2013). Save
the Post Office. Retrieved May 5, 2014 from www.savethepostoffice.com/
when-good-news-bad-news- postal-service-spins-its-Q3- financial -report
Here is an example of how this assignment
should look but should be more complex….
In July of
2010, the Securities and Exchange Commission charged Dell Inc. and some of its
executives with committing fraudulent accounting. The things they did caused
earnings to appear higher than they really were to Wall Street investors. The
change the executives made was to list income received from Intel through an
exclusivity deal as operating income.
The exclusivity deal with Intel was payment to Dell in exchange for them only
using Intel brand processors in the production of computers. The payments were
incorrectly recorded as operating income, causing their earnings from sales
appear higher than they were. It also made operating expenses appear lower than
they really were. This occurred between the years 2002 and 2006. In 2003, the
payments represented ten percent of their operating income, and in 2006 it was
up to thirty-eight percent. In the first fiscal quarter of 2007, the Intel
payments were recorded as seventy-six percent of Dell’s operating income. In
addition to the Intel payments, senior former accounting personnel also
maintained some reserve funds that they used to cover shortages in operating
results between 2002 and 2005. These adjustments made it appear that they were
meeting income targets while reducing operating expenses. An additional
accusation from the SEC was that Dell used these reserve manipulations to “materially
misstate its earnings and it operating expenses as a percentage of revenue”
(SEC, 2010) for more than 3 years.
In the second quarter of 2007, Intel stopped making payments to Dell. Operating
income fell to its proper level, and the investors wanted to know why there was
such a sudden decline. Dell accountants falsely claimed it was due to a sharp
drop in sales after they made some price changes. The result of these actions
was that the executives paid fines to the SEC varying from $3 to $4 million.
Dell, Inc. paid $100 million in fines. The accountants paid penalties ranging
from $50,000 to $83,000. Investors falsely believed that Dell was more
profitable than it actually was, which may have influence their investment
SEC. (2010). SEC Charges Dell and Senior Executives with Disclosure and
Accounting Fraud. US Securities and Exchange Commission. Retrieved from