Assignment 2: Accounting Quality

Based on the requirements of the Sarbanes-Oxley Act and SEC reporting requirements for publicly traded companies,

Write a four to five (4-5) page paper in which you:

1. Evaluate the critical elements of accounting quality. Compare and contrast balance sheet quality with earnings quality. Explain why both are important to financial statement readers.

2. Share one example of earnings management, explaining how it might be perpetrated and ways that investors might detect such behavior.

3. Examine the role of the executive leadership team (e.g., CEO and CFO) in establishing an ethical environment and corporate culture that promotes high quality financial reporting.

4. Assess the potential consequences for a publicly traded company when accounting quality is inadequate. Explain how management might minimize those consequences.

5. Evaluate the requirements of the Sarbanes-Oxley Act regarding accounting quality, indicating whether the current provisions are adequate to protect stakeholders. Support your position.

6. Use at least five (5) quality academic resources in this assignment. Note:Wikipedia and similar websites do not qualify as academic resources.

The specific course learning outcomes associated with this assignment are:
Assess the framework and reporting requirements of the Securities and Exchange Commission (SEC), U.S. Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and the Sarbanes-Oxley Act for publicly traded companies.
Evaluate the quality of accounting information for an organization, including the economic content and earnings sustainability.