Due to Covid-19, the company has not been performing well. Thus, the CEO asked the accountant to
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Question:
Due to Covid-19, the company has not been performing well. Thus, the CEO asked the accountant to change the inventory method to report better financial performance. The CEO explained that the accounting standards allow companies to change inventory methods. The CEO added that the accountant can always switch back the inventory method when things return to normal after Covid-19.
Explain whether you agree or disagree with the CEO to change the inventory method for earnings management purpose. You should also discuss the impacts on the users of the financial statements.
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