Please answer in complete sentences What are the major reasons for accounting scandals (WorldCom, Enron, etc.)? How do firms attempt to meet Wall Street analysts projection of earnings? Solution What are the major reasons for accounting scandals (WorldCom, Enron, etc.)? Accounting scandals leads to many problems, it not only causes problem for the perpetrator, but also everyone else around. Accounting fraud causes problems in the market places. Investors\' loose large sum of money due to the misrepresentation of financial position and financial status of the company. Also, because of this, there is lack of trust in the market, accounting system, and in the company in which accounting fraud was committed from the investors. Employees in that company are at rest of losing their job because of the scandal. Scandals are triggered by three elements, the first being rationalization, perceived pressure, and perceived opportunities. Whether the scandal derives benefits from the perpetrator directly, or indirectly, such as benefiting the company, the three elements are always present. Rationalization: perpetrators find some sort of rationalization that makes their behavior seem acceptable. Perceived Pressure: perpetrators are faced with some kind of pressure, whether it be financial pressure, or executive pressure. Perceived Opportunities: perpetrators see opportunity, such as promotion, otherwise they won\'t do it. How do firms attempt to meet Wall Street analysts projection of earnings? Managers must reconcile their company .

1. Please answer in complete sentences
What are the major reasons for accounting scandals (WorldCom, Enron, etc.)? How do firms
attempt to meet Wall Street analysts projection of earnings?
Solution
What are the major reasons for accounting scandals (WorldCom, Enron, etc.)?
Accounting scandals leads to many problems, it not only causes problem for the perpetrator, but
also everyone else around. Accounting fraud causes problems in the market places. Investors'
loose large sum of money due to the misrepresentation of financial position and financial status
of the company. Also, because of this, there is lack of trust in the market, accounting system, and
in the company in which accounting fraud was committed from the investors. Employees in that
company are at rest of losing their job because of the scandal.
Scandals are triggered by three elements, the first being rationalization, perceived pressure, and
perceived opportunities. Whether the scandal derives benefits from the perpetrator directly, or
indirectly, such as benefiting the company, the three elements are always present.
Rationalization: perpetrators find some sort of rationalization that makes their behavior seem
acceptable.
Perceived Pressure: perpetrators are faced with some kind of pressure, whether it be financial
pressure, or executive pressure.
Perceived Opportunities: perpetrators see opportunity, such as promotion, otherwise they won't
do it.
How do firms attempt to meet Wall Street analysts projection of earnings?
Managers must reconcile their company