Expectations of managing earnings downward

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1. The concept of accounting quality has several dimensions, but two characteristics often dominate: the accounting information should be a fair representation of performance for the reporting period and it should provide relevant information to forecast expected future earnings. Provide a specific example of poor accounting quality that would hinder the forecasting of expected future earnings.

2. Identify and explain conditions that would lead an analyst to expect that management might attempt to manage earnings upward and conditions that would lead to expectations of managing earnings downward.

Reference no: EM132951379

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