Lucent Technologies Company Profile

\nIntroduction aglow(predicate) Technologies lambent Technology is marriage Americas leading maker of telecommunication equipment and software, including switching and transmission equipment and billet communications systems. Lucent Technologies, hintted merchandise publicly in 1996 with an sign public go that was, at the time, the largest in domestic tarradiddle (Hayes). In December 1999, Lucents seam reached a high of $77.78 and was the nations quaternary most widely held business (Romero and Atlas). But by July 2001, Lucents assembly line was trading at $6.43, the siemens was investigating its report practices, and several(prenominal) former, high-level recognisers had been sanctioned by the SEC or were downstairs criminal indictment for wrong-doing while at Lucent (Romero and Atlas). The souse in rail line pry (exhibit 1) was primarily the answer of a November 21, 2000, announcement in which Lucent said it had to restate its pecuniary statements as a conduc e of an internal investigation revelation accounting irregularities. Lucents restatement reduced revenues by $679 million (McGough, Bloomberg).\n\nAs former(a) as June 2000, media attention had begun to be directed towards Lucents aggressive accounting policies. A Wall pathway Journal article in June, 2000 suggested that Lucent Technologies might be engaging in creative accounting practices, noting that Lucents receivables were lift at 49% while revenues were rising at only 20% (Wall Street Journal).\n\nAccounting constitution Reporting objectives Lucents chief executive Richard McGinn had turned Lucent into a Wall Street star by increasing gross revenue at a figure digit pace and was determined to maintain Lucents ontogeny. Many observers believed that Lucents gross revenue projections were imposed on sales executives by the chief executive who was intent on maintaining a 20 percent evolution rate (Berman and Blumenstein). Don Peterson was institute the executive vice c hairperson and CFO; he inform to CEO Richard McGinn and was accountable for the incorporate Finance Organization. Peterson explained in a 1999 article that revenue targets were reach because stock options were used as motivational tools (William, Hart). Motivation to manage earnings was based on executive compensation for performing well on the stock market. One of Lucents revenue growth simulated military operation included offering deep product discounts to father customers to purchase products now sooner of delaying these purchases. The short term result of increased up-to-date conclusion sales came at the spending of not realizing those sales in successive years. Other tactics designed to increase current period revenues and meet tell sales targets included the appendage of generous credit price to customers....If you want to get a full essay, order it on our website:

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