The Generally Accepted Accounting Principles (GAAP) used by publicly traded companies provide the foundation for the financial reporting system. A feature of GAAP is that it allows managerial judgment in many reporting decisions. This includes managerial estimates such as estimating how much of your receivables will not be collected, or what amount of sales are likely to be reversed due to various reasons (normal returns, recalls, etc.). This subjectivity in accounting is probably counterintuitive to most non-accountants. They may see accounting as a mathematical process that creates a specific financial result no matter who is in charge of the company. Discuss this flexibility of accounting. Do you believe this flexibility in accounting should exist? If you believe its good or bad, be sure to define the perspective from which youre writing (investors, managers, etc.) and give at least one example (real or hypothetical) that supports your answer.