Financial information manipulation and a case study

Financial knowledge has a big importance and effect in economy. To form an effective capital market, the financial knowledge must be reliable. Reliability and equality of opportunity principles are the fundamental principles of stable and affective capital markets. However, sometimes these principles are disobeyed. Irrational behaviour of some market participants makes unexpected volatility in market and it is called manipulation. The methods of financial knowledge manipulations such as ?Income management?, ?fictive financial statements?, ?creative accounting?, ?aggressive accounting?, ?making the income stable? and ?irregularity in accounting? have negative effects on economy. Sometimes, for some personal or corporate reasons, the published information about firms can be changed. SPK (Capital Markets Board of Turkey) describes the financial knowledge manipulation as giving wrong and colorable information or doing wrong comments that can affect the value of capital market instruments or not to report the information that must be reported.The aim of this thesis is to explain the reasons, aims, methods and the results of financial knowledge manipulation and to determine the methods and frequency of financial knowledge manipulation in ISE. By using the weekly reports of SPK the methods of financial knowledge manipulations applied by some firms which are quoted to ISE are determined. Moreover, some suggestions are included in thesis about actions can be taken to prevent the financial knowledge manipulations.