Earnings Management in Financial Crimes Cases

Earnings management is one of the most common financial fraud schemes. Someone charged with a managing earnings crime is facing serious penalties and other long-term consequences. This is why if you have been arrested for such a crime, contact a seasoned federal financial crime lawyer who is experienced in managing earnings in Michigan financial crimes cases. The sooner you call an attorney, the sooner they can begin working on a defense for you.

Earnings management is the manipulation of expenses or revenue using accounting techniques that give an overly optimistic picture of a company's business and financial position. Most managing earnings in Michigan financial crimes cases involve market manipulation or through other accounting errors. Agents examine accounting records, business information, and financial statements inputted on a daily basis. Bankers use that to determine whether to loan money to a client or to identify the terms of a loan.

Investment bankers use accounting information to analyze the potential for mergers and acquisitions. Consultants use it to formulate client strategies. However, the reliability of the information might be in question. Some people may believe the information provided is not accurate and they are highly suspect of those kinds of activities. They consider standard accounting principles as opposed to creative accounting.

People should be careful that the entity being considered is complied with standard accounting procedures and does not give an inaccurate picture of the financial health of a particular business or entity. Investigations into such financial crimes are taken very seriously by the authorities.

When managing earnings in Michigan, one wants to paint a positive picture of their company and its financial health because this affects their ability to get loans and financing. It could also impact the company's ability to be perceived as a company people want to invest in. When someone is preparing a profile of their company, they need to do it in a way that paints a rosy picture of their financial structure without crossing a line that might lead to an allegation that they improperly represented the financial security of their business.

There is some flexibility in accounting procedures as to how particular obligations may be categorized and handled in the records. The person preparing the documentation should make sure they are as advantageous as possible without crossing the line to avoid being charged with an offense. A financial institution needs the assistance of a good accountant and a lawyer to determine whether the picture they present is accurate or might give rise to a criminal investigation in the future.

The federal law is applied across the board regarding earnings management. The legal consequences are the same regarding a federal crime in Michigan as they are in Indiana, New York, or California. If the event occurs in Michigan, the applicable penalties and legal standards are handled across the nation. For instance, the FBI has a financial crimes section in Washington that oversees their financial crime investigations. Their priorities and procedures are set to accommodate most of the nation.

The consequences of a conviction may include prison time and steep fines. Therefore, if you are facing charges, call an attorney who is well-versed in managing earnings in Michigan financial crimes cases.