Banking on Leverage

Authors

George M. Mickhail, University of WollongongFollow
Fahrettin Okcabol, Mercy College
Tony Tinker, Baruch College at the City University of New YorkFollow
Aida Sy, School of Business, Manhattan CollegeFollow

RIS ID

37879

Publication Details

Okcabol, F., Tinker, T., Sy, A. & Mickhail, G. M. (2011). Banking on Leverage. Proceedings of the American Accounting Association Annual Meeting (pp. 1-21). Denver, CO.: American Accounting Association.

Abstract

Few professions can claim to have instigated -- almost single handed -- a World-Wide recession. Yet the breakdown in accounting controls and financial reporting are primary constituents of the current economic meltdown. The housing market bubble involved the excessive use of leverage finance. These high-risk practices could have been prevented by the proper application of accounting controls and financial reporting. Yet it would be a mistake to reduce the crisis to a technical accounting failure. Rather, the context of this failure 'necessitated' the accounting failures.