Management always behaves ethically

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Reference no: EM132231858

What ideas do you think a management team might suggest to generate additional operating income in the months of November and December (slower months of the season)? Specifically, think about business actions they could take, or financial reporting choices they could make, to generate additional operating income. Consider management’s likely actions and choices under three different scenarios:

(a) Management always behaves ethically, and would never take actions or make financial reporting choices that violate U.S. GAAP.

(b) Management is willing to bend (but not break) U.S. GAAP. Actions that bend (but do not break) U.S. GAAP ‘‘are often viewed as aggressive if the tactics push the envelope and stretch the flexibility of GAAP beyond its intended limits . . . [however] without objective evidence, it’s difficult to distinguish between legitimate choices made within GAAP and earnings management’’

Reference no: EM132231858

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