Income Smoothing and Big Bath free essay sample

The accounting literature provides broad evidence that managers use discretion in financial statements for purposeful adjustments of earnings figures beyond the true and fair view (Leuz et al. 2003, cited by U. Schaffer et al. , 2012). There are two methods which are Income Smoothing and Big Bath. â€Å"Income Smoothing involves taking steps to reduce the good years and defer them for use during the business down-turn years† (Gin Chong, 2006). In comparison, Big Bath manipulation in the financial statistics indicates a great fluctuation. However, Income Smoothing is more ethical in accounting practice than Big Bath due to the reasons compared below. Income Smoothing has been applied in financial accounting because of its value. At first, a company uses it as a method to avoid a significant drop in its stake price due to missing a predetermined target. This method can be achieved in the annual financial reporting by accounting measures, like delaying current advertisements fee from the current to the forthcoming period, or gaining the provision of arrangements of bad debts. We will write a custom essay sample on Income Smoothing and Big Bath or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Managers sometimes have to do this; they make a bit change on the financial statements in order to avoid an obvious market reaction in a particular period. Furthermore, if a company’s developing-line fluctuates frequently up and down, its stakeholders and managers will lose their passion or confidence in the long run. An overwhelming 96. 9% of the survey respondents indicate that they prefer a smooth earnings path(Graham et al. , 2005, cited by Tucker and Zarowin, 2006). In most cases, management seeks to have a steady and predictable growing rate, with the hope that the market will associate smooth earnings with lower risk and higher stock prices and managers may personally benefit if incentive plans reward smoother earnings. At last, the theory of Income Smoothing is suitable to the current social trend. Therefore, it is considered to be a creative accounting method and has been widely applied in the company operation. Though Income Smoothing has a few advantages, Big Bath is also ethical in practice and one commonly cited incentive for Big Bath behavior is a change in management. A Big Bath is a way to blame prior management for problems when there is a management change. Prior research shows evidence consistent with incoming executives managing accruals to decrease earnings in the year of the change with a turnaround in earning the following year. Besides this, with big behavior, management delays recognition of discretionary losses and then takes them when earnings are below benchmarks. In summary, Income Smoothing is a more ethical practice than Big Bath since it is applied more widely for three reasons, meeting the forecasts, welcome by managers and apt to social trends. On one hand, income smoothing could be widely adopted by company managers to undergo financial crisis in a particular period. On the other hand, managers should operate within the legal and ethical boundaries, at the same time, they should adopt a strategy that could systematically undermine the quality of financial reporting and manipulate accounting information.

The Complete Teachers Guide to Discipline Referrals

The Complete Teacher's Guide to Discipline Referrals Classroom management and student discipline play a significant role in the daily duties of an educator. Those teachers who have a good handle on these practices find that they can spend more time teaching and less time managing their students.  Every discipline infraction serves as a distraction of some sort for all involved. Effective teachers can resolve an issue quickly and appropriately with minimal disruption of the learning process. Managing Discipline Referrals in the Classroom Teachers must be careful that they do not make a mountain out of a molehill.  They must manage and evaluate a situation correctly. If the situation warrants a discipline referral, then the student should be sent to the office. A teacher should never send a student to the office simply because they need a break or dont want to deal with it.  Students must be held accountable for their actions. However, complete reliance on the principal for handling all discipline issues is indicative of a failure to effectively manage a classroom on the teachers part. It is important to note that it works the opposite way as well. If a teacher never sends a student to the office, then they are not taking full advantage of the resources available to them. A teacher should never refuse to send a student to the office simply because they are worried about what their principal thinks. Sometimes making a discipline referral is necessary and the right decision. Most administrators understand this and will not think anything about it if you occasionally refer a student to them. For these reasons, every principal should develop a simple guide to discipline referrals for their teachers to follow. This guide should indicate what offenses should be dealt with in the classroom by the teacher and which offenses should result in a discipline referral. This guide to discipline referrals will eliminate guessing by the teacher and ultimately makes the principals job easier. Handling Minor Disciplinary Offenses The following offenses should be handled by the teachers themselves. In most cases retraining the students in procedures will be sufficient, though establishing and following through with classrooms consequences will help reinforce and minimize re-occurrences. A student should not be sent to the office for violating a single offense. These offenses are assumed to be of a minor nature. It is important to note that one of these minor issues can become major when it recurs on a regular basis. If this is the case and the teacher has exhausted an array classroom management and discipline techniques including contact of parents, they should go ahead and refer them to the office. Possession of gum, candy, toys, radios, etc.Passing notes.Failure to follow procedures.Cheating on daily assignments.Failure to bring appropriate materials to class.Petty conflicts among students.Disruptive behavior in the classroom, which is of a minor nature.Missing assigned teacher detention the first scheduled time.Not working in class after parent contact.Tardiness to class (first two occurrences).Use of electronic telecommunication devices for non-educational purposes (i.e. texting, social media, etc.) Handling Major Disciplinary Offenses The following offenses should result in an automatic referral to the office for discipline - NO EXCEPTIONS. Blatant disrespect towards the teacher.Bullying another student.Cheating on a quiz, test, or exam.Missing detention twice after parent contact.TheftLeaving class without permission.Obscene language or gesture.FightingObscene pictures or literature.Vandalism.Smoking and/or possession of smoking materials or tobacco.Possession, consumption, sale, or being under the influence of alcohol or drugs.Possession of fireworks, matches, lighter, or another caustic device.Verbal abuse of adults or students.Open defiance/insubordination.Threats by word or deed. Many students never have serious discipline problems. This list will serve as a guideline for teachers who do have policy violations by students in their classrooms. The teacher should use fair and appropriate judgment in the exercise of any discipline. The goal of any teachers disciplinary actions should be to prevent the inappropriate behavior from occurring again. In all cases, the administrator will have the flexibility to respond differently to various situations. The frequency, intensity, and duration of the misconduct are factors that influence the possible consequences.