Question
Case 7-5: Dell Computer 1.In his analysis of the Dell fraud for Forbes, Edward Hess comments: Too often, the market's maniacal focus on creating ever-increasing
Case 7-5: Dell Computer
1.In his analysis of the Dell fraud for Forbes, Edward Hess comments: "Too often, the market's maniacal focus on creating ever-increasing quarterly earnings drives bad corporate behavior, as it apparently did at Dell. That behavior produces non-authentic earnings that obscure what is really happening in business. Short-termism can result in a range of corporate and financial games that may enrich management at the expense of market integrity and efficient investor capital allocation." Comment on Hess's statement from two perspectives: earnings management and financial analysts earnings projections.
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