4-1 Discussion: Accounting Quality
In the last 10 years, there have been a number of high-profile incidents in which companies have adversely impacted investors and their own profitability because of measurement error or measurement bias in financial statements and reports. For this discussion, research such an incident within the last five years using credible news and financial publications (e.g., Bloomberg, The Financial Times, The Wall Street Journal, The Economist).
After you choose and research your incident, answer the following questions:
- Was the incident you chose an instance of measurement error or measurement bias? What action did the company take that resulted in error or bias?
- What were the consequences of the action?
- What steps, if any, did the company take to rectify the situation?
- What steps might the company have taken to improve accounting quality.
In your responses to your peers, confirm or challenge their recommendations for improving accounting quality and offer additional recommendations. Address whether there were any similarities or differences in the incident you chose and those of your peers. Discuss whether you think this may indicate a trend in regard to accounting quality (or a lack thereof).
To complete this assignment, review the Discussion Rubric document.