Answered: Analyze and discuss when earnings…

Business

Accounting

Analyze and discuss when earnings management may be an ethical practice and when it is an unethical practice.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 14Q: What is the difference between earnings management and earnings manipulation?

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Similar questions

Is there a way to prevent managers from focusing on accounting measures as performance measures?
Why do accountants have to be ethical in their duties and responsibilities?
What is the difference between earnings management and earnings manipulation?
Evaluate earnings management from a utilitarian perspective. Can earnings management be an ethical practice? Discuss why or why not.
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Evaluate the following statements from an ethical perspective:“Earnings management in a narrow sense is the behavior of management to play with the discretionary accrual component to determine high or low earnings.”“Earnings are potentially managed, because financial accounting standards still provide alternative methods.”
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Define materiality. How does materiality come into play when assessing financial statement restatements? Other than materiality, what is the one word that might be the most distinguishing factor between ethical earnings management and unethical earnings management?
Managers are often faced with conditions that may cause earnings to be managed. There is a difference between managing income and manipulating earnings. Excluding the ethical and fraud issues associated with managing earnings: Identify conditions that would lead an analysist to expect that management might attempt to manage earnings upward and, Identify conditions that would lead an analysist to expect that management might attempt to manage earnings downward.
How do the concepts of cognitive dissonance and organizational/ethical dissonance relate to whether an accountant might choose to blow the whistle on corporate wrongdoing?