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Which of the following statements is TRUE ? 1. Earnings management (EM) is less likely when the financial reports are used solely for reporting purposes

Which of the following statements is TRUE?

1.

Earnings management (EM) is less likely when the financial reports are used solely for reporting purposes and not for other purposes

2.

Earnings management (EM) is less likely when there has been a change in accounting principles or estimates

3.

Earnings management (EM) is less likely when the firm has been experiencing constant or falling sales

4.

Earnings management (EM) is less likely when the firms governance structure is weak

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