Question
Earnings management can be defined as deliberate interference by management in the procurement process that is usually to meet self -interest objectives (Schipper, 1989). Procurement
Earnings management can be defined as "deliberate interference by management in the procurement process that is usually to meet self -interest objectives" (Schipper, 1989). Procurement management techniques can be divided into two namely cosmetic (without affecting cash flow) and real (affecting cash flow). Required: The management of the company wants to increase revenue for the current period.
a) List three (3) "cosmetic" methods and three (3) "real" methods that can be used (6 Marks)
b) Explain how this method can help in achieving the company's objectives by giving appropriate examples to support your answer (24 Marks)
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