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Anonymous asked in Business & FinanceInvesting · 3 years ago

How much falsifying is done in company reports? How do you know they are not falsifying reports to prevent stock holders from profiting?


how would a CEO screw a short seller?

Update 2:

could you be forced to sell your stock at a loss which would prevent you from making a profit?

Update 3:

anonymous, no I have never invested in a stock you idiot...maybe YOU LOST so YOU should admit it like a man

Update 4:

why do so many idiots troll on here when it's not even an answer?

Update 5:

paranoid? heard of Enron

Update 6:


Update 7:

well Enron was not the only one and I read an article that cooking the books isn't a rare thing but it was stated that Enron and some other companies did it to a higher degree

1 Answer

  • 3 years ago
    Favorite Answer

    "How do you know they are not falsifying reports....?"

    Auditors and personal liability of CEOs/CFOs for the information provided on quarterly and annual reports per the Sarbanes Oxley act.

    Edit: Sarbanes Oxley is the legislation that came out of the Enron & Worldcom scandals. Read up on the law and its requirements and that should help you feel better about the financial statements provided by public companies.

    After seeing what happened to Arthur Anderson with being complicit in the Enron & Worldcom scandals, audit firms will not take the chance on signing off on financials without serious review and testing.

    Also, it would very rare for corporate management to want to prevent stockholders from profiting, as that would be a detriment to themselves. Many major corporations provide stock options to top executives as part of their compensation packages, so why would they want to drive stock values down? Both Enron & Worldcom were cases of fraud used to falsely prop stock values up, not down.

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