What does he mean by dim the signals

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Question - Read the article entitled "Lies, Damned Lies, and Managed Earnings The crackdown is here". It is posted on Canvas at the bottom of the Assignments section in the Assignments tab.

In one part of the article, Harvey Goldschmid makes a couple of comments regarding "cookie jar reserves". Explain to an unsophisticated investor what Goldschmid is saying. For example:

1. Why would it be more difficult to fairly value a company? Consider how earnings are used in the valuations of businesses. Etc.

2. What does he mean by "dim the signals"? What signals do financial statements give? How would a user identify such signals in financial statements? How do "cookie jar reserves" dim those signals? Etc.

Reference no: EM132997703

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