Short-Term results versus 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,

* Over time, 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.