Short-Term results verses Long-term Growth:

Often, Short-Term operating results can be improved at the expense of Long-term growth.

* Reducing expenditures for developing new products may increase earnings and net cash flows in the current period,

* Overtime, this strategy may lessen the company's competitiveness and Long-term profitability.

Academic research investigates this as " real earnings management " ( REM- where we " manage " earnings upward via real economic changes to our business)

1. Do you think that managing earnings in this way is a smart choice for a CEO or CFO? Why or why not?

2. Is this a smart choice for the business? Why or why not?

3. Should these answers be the same? Why might they be different?

In your responses, consider both ethics and the for profit nature of the business, Also name one transaction type you think is REM