The August 16, 2007, issue of the Wall Street Journalincludes an article by Michael Corkery and David Reilly titled “Beazer’s Accounting Woes Extend Roller Coaster Ride.”
Instructions
Read the article and answer the following.
(a) Explain what is meant by cookie jar accounting? Why might a company engage in cookie jar accounting?
(b) The article says the company released “unaudited” financial statements to investors.
What does “unaudited” mean? What are the implications to investors of receiving “unaudited” financial statements?
(c) Because of its accounting problems, Beazer was late in providing its audited financial statements to the SEC. What are the possible ramifications of not submitting an annual report on a timely basis?