Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6. One of the analytic tools that the SEC uses in the EPS initiative is to look at the number of times numbers are in

image text in transcribed
image text in transcribed
image text in transcribed
6. One of the analytic tools that the SEC uses in the EPS initiative is to look at the number of times numbers are in a company's reported EPS. For example, if a company were incorrectly rounding up its reported EPS, the number "4" would show up fewer times than the 10% of time it would be expected to appear. The following table summarizes the frequency the numbers zero through nine appear in the tenths place of actual EPS for the 13,537 companies not identified as suspect firms and the 558 companies in the suspect sam [Ye1 For the companies in our analysis, the number four is the only decimal to appear in the tenths place of EPS with the expected rate of 10% of the time. What do you think it means that the numbers less than four are appearing in the tenths place of EPS more frequently than what would be expected? 6. One of the analytic tools that the SEC uses in the EPS initiative is to look at the number of times numbers are in a company's reported EPS. For example, if a company were incorrectly rounding up its reported EPS, the number "4" would show up fewer times than the 10% of time it would be expected to appear. The following table summarizes the frequency the numbers zero through nine appear in the tenths place of actual EPS for the 13,537 companies not identified as suspect firms and the 558 companies in the suspect sam [Ye1 For the companies in our analysis, the number four is the only decimal to appear in the tenths place of EPS with the expected rate of 10% of the time. What do you think it means that the numbers less than four are appearing in the tenths place of EPS more frequently than what would be expected

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions