Backdating accounting definition

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But what about when this happens in the commercial sector and how should we react?From the point of view of the customer, who processes invoices and will, obviously, avoid telling the accountants/auditors that they should be prepaid this is clearly false accounting but how about the supplier who records the sales invoice 31 March as a debtor but, obviously, will carry it forward as deferred income.It's common knowledge that local authorities, schools, and other public sector organisations will deliberately find ways to spend their unspent budgets as they approach 31 March for fear of losing funding for next year.

But what about when this happens in the commercial sector and how should we react?From the point of view of the customer, who processes invoices and will, obviously, avoid telling the accountants/auditors that they should be prepaid this is clearly false accounting but how about the supplier who records the sales invoice 31 March as a debtor but, obviously, will carry it forward as deferred income.

The stock option “backdating” scandal has implicated several (mostly technology) companies over the past few months.

The SEC and other federal authorities are currently investigating more than 50 companies suspected of illegal, undisclosed options backdating practices, and the first criminal charges relating to these practices are expected shortly.

The exercise price of an option is crucial because it is the price the executive or employee option holder must pay to the company when exercising options in return for newly issued shares.

If the exercise price were $0, then options would be nothing more than free stock grants, and treated as such in the eyes of recipients.

You’d think that shareholders wouldn’t tolerate the use of accounting sleight of hand to compensate executives while bypassing the traditional “selling, general, and administrative” line in the income statement.

But abuse of stock options has been allowed to perpetuate for years.

For periods beginning on or after 1 January 2015, FRSs 100, 101 and 102 came into force, bringing with them a number of new options for all UK entities and groups. In addition to the above three Standards, two additional Standards were in force from 1 January 2015 - FRS 103 FRS 102.

Companies who operate within specialised industries or sectors will also apply the requirements of their specific Statement of Recommended Practice (SORP) in conjunction with the Financial Reporting Standards.

Regardless of its neutrality in the P&L, should I be concerned that the paperwork should never have arisen in the first place and that this has almost certainly generated false accounting elsewhere?

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