Enforcement mechanisms in place to restrict such activity

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Reference no: EM131011158

Managers are responsible for ensuring fair and accurate financial reporting. Managers also have inside information that can aid their estimates of future outcomes. Yet, managers face incentives to strategically report information in their best interests.

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Assume a manager of a publicly traded company is intending to recognize revenues in an inappropriate and fraudulent manner. Explain the penalty(ies) that can be imposed on a manager by the monitoring and enforcement mechanisms in place to restrict such activity.

Reference no: EM131011158

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