The Research Of Goodwill And Company Earning Munipulation

This thesis introduced the definition of goodwill first: Including the different understanding of goodwill, the few stages different definitions developed, as well as its current understanding. According to FASB-141, 142, this thesis focuses on the financial statements of listed companies in America, to check if their financial statements meet the standard of the regulator. Last but not least, this thesis aims to find any relationship draw between goodwill impairment and company profit manipulation.The methodology of this thesis is to go through the financial reports of American listed companies in 2007, collect data related to this thesis and set up the database. Then the author went through the database to screen out less than 100 companies as the research group. The groups were divided into 2 according to the way the company treat its goodwill. Once the 2 main groups are settled, the author did her research by two different dimensions: size as well as compliance. Although evidence shows some connection between the figures, the overall result shows it is difficult to draw any obvious conclusion between the ways company treat its goodwill, as well as whether the company went through certain kind of profit manipulation process. Therefore no conclusion can be drawn for such statement as said above.As for the financial storm which hits US hardly in the year 2009, there was evidence of profit manipulation everywhere. Therefore researches of such kind should be carried out further for the purpose of better regulates the market.