Asked by Megan Moinipour on May 22, 2024
Verified
A version of earnings management that became common in the 1990s was
A) when management made changes in the operations of the firm to ensure that earnings did not increase or decrease too rapidly.
B) reported "pro forma earnings."
C) when management made changes in the operations of the firm to ensure that earnings did not increase too rapidly.
D) when management made changes in the operations of the firm to ensure that earnings did not decrease too rapidly.
Earnings Management
The practice of using accounting techniques to produce financial reports that may mislead stakeholders about a company's financial condition.
Pro Forma Earnings
Pro forma earnings refer to a company's earnings that exclude certain costs or expenses, typically non-recurring items, to provide a clearer picture of its financial performance.
- Analyze the impact of earnings management on financial reporting and investment decisions.
Verified Answer
Learning Objectives
- Analyze the impact of earnings management on financial reporting and investment decisions.
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