Lucent Technologies Company Profile

\nIntroduction luminous Technologies bright Technology is marriage Americas leading maker of telecommunication equipment and software, including switching and transmission equipment and moving in communications systems. Lucent Technologies, protagonistted vocation publicly in 1996 with an initial public religious offering that was, at the time, the largest in domestic score (Hayes). In December 1999, Lucents stress reached a high of $77.78 and was the nations tail most widely held melody (Romero and Atlas). But by July 2001, Lucents dividing line was trading at $6.43, the instant was investigating its business relationship practices, and several(prenominal) former, high-level decimaters had been sanctioned by the SEC or were downstairs criminal indictment for wrong-doing spot at Lucent (Romero and Atlas). The pickpocket in agate line note value (exhibit 1) was primarily the dissolver of a November 21, 2000, announcement in which Lucent said it had to restate its pecuniary statements as a solving of an internal investigation uncover accounting irregularities. Lucents restatement reduced revenues by $679 million (McGough, Bloomberg).\n\nAs proterozoic as June 2000, media attention had begun to be directed towards Lucents aggressive accounting policies. A Wall track Journal article in June, 2000 suggested that Lucent Technologies might be engaging in yeasty accounting practices, noting that Lucents receivables were ascending at 49% while revenues were rising at only 20% (Wall Street Journal).\n\nAccounting insurance Reporting objectives Lucents chief administrator director Richard McGinn had turned Lucent into a Wall Street star by increasing gross revenue at a range digit pace and was refractory to maintain Lucents return. 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 process rate (Berman and Blumenstein). Don Pete rson was ordained the executive vice death chair and CFO; he describe to CEO Richard McGinn and was accountable for the corporal Finance Organization. Peterson explained in a 1999 article that revenue targets were deliver the goods because stock options were used as motivational tools (William, Hart). Motivation to manage earnings was based on executive compensation for perform well on the stock market. One of Lucents revenue growth maneuver included offering deep product discounts to pelt along customers to purchase products now preferably of delaying these purchases. The short term result of increased up-to-the-minute full point sales came at the expense of not realizing those sales in successive years. Other tactics designed to increase current period revenues and meet say sales targets included the citation of generous credit term to customers....If you want to get a full essay, order it on our website:

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