Paper 2 · Ratio Analysis
A reason a company might window dress its accounts is to
Aincrease the tax it must pay on its profits
Breduce the price of its shares on the stock market
Cdelay the publication of its annual report
Dattract investors by showing a stronger position
Explanation: The accounts are what outsiders judge the company on, so a stronger looking balance sheet can raise the share price, attract investment and secure finance on better terms. Management bonuses tied to reported results give a further motive.
Derived from ZIMSEC Business Enterprise Skills Paper 2, Specimen Paper, Q5