Asked by McKall Hulsey on May 02, 2024
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Earnings management is
A) when management makes changes in the operations of the firm to ensure that earnings do not increase or decrease too rapidly.
B) when management makes changes in the operations of the firm to ensure that earnings do not increase too rapidly.
C) when management makes changes in the operations of the firm to ensure that earnings do not decrease too rapidly.
D) the practice of using flexible accounting rules to improve the apparent profitability of the firm.
Flexible Accounting Rules
This refers to accounting principles that allow for some degree of judgement or choice in how financial transactions are recorded and reported, providing flexibility in financial reporting.
Earnings Management
The practice of using accounting techniques to produce financial reports that present an overly positive view of a company's business activities and financial position.
- Examine the influence of earnings manipulation on financial statements and investment choices.
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Learning Objectives
- Examine the influence of earnings manipulation on financial statements and investment choices.
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