Question
Answer the questions below based on your reading of Levitt 1998. (The Number Game) Part 1. 1) At the beginning of the speech, Levitt discussed
Answer the questions below based on your reading of Levitt 1998. (The Number Game)
Part 1. 1) At the beginning of the speech, Levitt discussed his concern over selective disclosure. What does selective disclosure mean? Which regulation was passed later (2000) to combat this common practice?
2) Levitt commented on earnings management as a game that, if not addressed soon, will have adverse consequences for America's financial reporting system. Do you think hes right or not?
3) According to Levitt, why managers manage earnings?
4) According to Levitt, earnings management is good or bad?
5) According to Levitt, who is to blame for the erosion of financial reporting quality?
Part 2. 1) Why do you think standards setters allow alternative accounting treatment and flexibility in financial reporting?
2) What are the five popular techniques used to manage earnings? Discuss each of them. Part 3. 1) Levitt proposed a nine-point action plan. List and discuss the nine actions.
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