What are methods by which earnings management is attempted

Assignment Help Managerial Economics

Reference no: EM131114340

Writing Assignment

Purpose:

This assignment will help you to understand:

1. Earnings manages;
2. The most common revenue-recognition abuses in the field; and
3. The impact of revenue-recognition abuses on reported net income.

Task:

Read the article "How Are Earnings Managed? Evidence from Auditors" in Accounting Horizons, 2003 (Supplement) and answer the following questions:

1. What is earnings management?

2. What are the specific methods by which earnings management is attempted?

3. What are the four most common revenue-recognition abuses identified by auditors in that article? From the examples provided in the article, briefly explain each abuse.

4. Did revenue-recognition abuses tend to increase or decrease net income in the year they occurred?

5. Did auditors tend to require clients to make adjustments that reduced the revenue-recognition abuses they detected?

Criteria for success:

You will be successful in this assignment if you can:

1. Provide answers to all of the questions with descriptions that are clear to another reader; and
2. Obtain related information from the article when construct your responses.

Reference no: EM131114340

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