a. If management reports truthfully, what economic events are likely to prompt the following accounting changes?

• Increase in the estimated life of depreciable assets

• Decrease in the uncollectibles allowance as a percentage of gross receivables

• Recognition of revenues at the point of delivery, rather than at the point cash is received

• Capitalization of a higher proportion of software R&D costs

b. What features of accounting, if any, would make it costly for dishonest managers to make the same changes without any corresponding economic changes?

AppendixLO1