How you would respond on the managements comment

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Question: While auditing the accounts of a publicly listed company you notice that some of the items have not been prepared in accordance with relevant accounting standards. On further investigation you see that this has been occurring over the past few accounting periods. None of these items are material in themselves and their combined effect is not financially material. Management of the company are aware of this practice and see it as normal management of earnings.

Explain how you, as a newly appointed accountant would respond on the management's comment that this practice is indeed a normal earnings management.

Reference no: EM132745243

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