Question
Earnings management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the
- Earnings management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers. (Healy and Wahlen, The Effect of Bonus Schemes on Accounting Decisions, Journal of Accounting and Economics, April 1999, pp. 85107).
Required:-
Why management wants to use the accruals method as opposed to using real actions to manage earnings? Why is it important for managers to meet earnings targets?
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Routledge Handbook Of Environmental Accounting
Authors: Jan Bebbington, Carlos Larrinaga, Brendan O'Dwyer, Ian Thomson
1st Edition
0367724901, 9780367724900
