Asked by hannah mazzeo on Jun 04, 2024

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In industries that are subject to unwanted attention from politicians,managers sometimes use accounting methods to make the company seem less profitable than it really is.

Unwanted Attention

Undesirable focus or notice from others, often causing discomfort or distress.

Accounting Methods

Accounting methods refer to the rules a company follows in reporting revenues and expenses in its financial statements. The two main types of accounting methods are accrual basis and cash basis.

Politicians

Individuals involved in governing or making public policies, often holding elected positions.

  • Comprehend the adaptability in accounting and its influence on the breaches of covenants and fluctuations in interest rates.
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ZK
Zybrea KnightJun 04, 2024
Final Answer :
True
Explanation :
This is a common practice known as "income smoothing" or "earnings management" where companies manipulate their financial statements to present a smoother and more consistent picture of their earnings over time, in order to avoid fluctuations that may attract government intervention or investor skepticism. While not always illegal, these practices can be unethical and deceptive, and may lead to legal and reputational risks if discovered.