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Question - Topic - Earnings Management Techniques - Accountants use estimates in determining many things including depreciation, allowance for doubtful accounts, amortization and depletion calculations, treatment of R&D expenditures. It is expected that the estimates are based on prior experience but estimates can also be used to manipulate amounts reported on the financial statements to raise or lower reported income.
For this week's discussion, go to the Internet and research accounting estimates, change of estimate, and how this relates to earnings management. Is earnings management acceptable under GAAP? Is all earnings management bad? What are the ethical implications of earnings management in terms of impact on the stakeholders?
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