Interpreting the Financial Press
The October 4, 2004, edition of BusinessWeek presented an article titled “Fuzzy Numbers” on issues related to accrual accounting and its weaknesses that have led some corporate executives to manipulate estimates in their favor, sometimes fraudulently.
Required:
Read the article and then answer the following questions:
1. What is accrual accounting?
2. What does the article’s title “Fuzzy Numbers” mean?
3. What does the article suggest about the reforms adopted by Congress and the SEC?