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Explain discretionary accruals vs non-discretionary accruals

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Reference no: EM132585468

Healy (1985) explores the bonus plan hypothesis with reference to the use of discretionary accruals to manipulate reported earnings and ultimately manager's bonuses.

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Question 1: Explain the difference between discretionary accruals and non-discretionary accruals, with reference to examples. Present the arguments made by Healy concerning discretionary accruals and how they are used to manipulate earnings and management bonuses.

Reference no: EM132585468

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