Engage in earnings manipulation

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For each of the following factors, determine if the given change or level of that factor would lead an analyst to believe that managers of a firm are more or less likely to engage in earnings manipulation:

 

Earnings Manipulation

 

More likely/less likely

1. Days Sales in Receivable Index increases

 

2. Gross Margin Index decreases below 1

 

3. Asset Quality Index increases

 

4. Depreciation Index decreases to below 1

 

5. Leverage Index increases

 

Reference no: EM133057099

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