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According to the political cost hypothesis of Positive Accounting Theory within the available set of accounting policies:

According to the political cost hypothesis of Positive Accounting Theory within the available set of accounting policies:

Large firms are politically sensitive and are more likely to use accounting methods to increase reported profits.

Large firms are more likely than small firms to use accounting choices that reduce reported profits.

Large firms are more likely than small firms to use accounting choices that increase reported profits.

Small firms are more likely than large firms to use accounting choices that reduce the reported profits.