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Shareholder activism is the way in which shareholders exercise their ownership rights to influence a company's behavior. Activist investors, dissatisfied with certain aspects of a company's management, seek to cause a change within the company by resorting to various forms of activism, ranging from selling off shares to acquisition of controlling interest in the company. In between these extreme steps, other actions like issuing private or public communications ...
Creative accounting refers to accounting practices that seem to follow the letter of the applicable accounting standards but deviate from the spirit of those standards. The motivation to indulge in these practices is anticipation of rewards which may include higher share prices, improved credit rating resulting in lower borrowing costs, higher incentive compensation for executive management etc. Some of the creative accounting schemes perpetrated by companies ...