Answered: Evaluate earnings management from a…

Evaluate earnings management from a utilitarian perspective. Can earnings management be an ethical practice? Discuss why or why not.

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?

See similar textbooks

Related questions

Q: Explain the difference between conservative and aggressive accounting practices.

Q: Discuss how earnings management is used as a tool to reduce sensitivity to political pressure.

A: Earning management is being associated with the use of discretionary accounting accruals in order to…

Q: Define the phrase “earnings management.” Under what conditions, if any, is earnings management…

A: Payments and receivables are managed in connection to purchases in earnings management. It is done…

Q: Explain the political cost hypothesis of Positive Accounting Theory.

A: Positive accounting: It is referred to as the branch of accounting research that helps to explain…

Q: distinguish between conservative and aggressive accounting;

A: Accounting is the process through which financial statement are recorded, analyzed, summarized and…

Q: Define materiality. How does materiality come into play when assessing financial statement…

A: Materiality is the threshold above which missing or incorrect information in the financial…

Q: explain the relationship between culture and the adoption of accounting practices

A: Culture includes the beliefs, ideas and customs followed by the individuals in a particular society.…

Q: A process that create a financial position that offsets the risk of an ongoing business process is…

A: Transfer of risk: Transfer of risk is one the strategy for risk management. This involves transfer…

Q: Analyze and discuss when earnings management may be an ethical practice and when it is an unethical…

Q: Employees need the financial analysis to know if

A: Financial analysis refers to the process of evaluating the business operations, performance and…

Q: What are the costs and benefits of management’s use of judgement in financial reporting?

A: Management is the internal part of any organization and thus it plays a very crucial role in making…

Q: Management often considers which of the following when making business decisions? O both financial…

A: When making business decisions management considers factors like financial viability of the decision…

Q: Critically comment on Positive Accounting Theory (PAT) (

A: Accounting is a process that involves the recording of the transactions of financial nature.

Q: How would you define business ethics?

A: Business ethics: Business ethics is a practice of suitable commercial rules concerning possibly…

Q: s of financial management and provide strategies used by financial managers to overcome/avoid these…

A: Step 1 Financial risk management is the process of dealing with and controlling potential and…

Q: quality of accounting standards?

A: Accounting standards determine thee accounting information must have relevance, must be reliable and…

Q: Evaluate the following statement: Do the ends of positive organizational consequences justify the…

A: Earning management is an accounting device that is used to produce the economic statements showing…

Q: What is the so-called BUSINESS JUDGMENT RULE? Discuss

A: Business Judgment Rule:- The business judgment rule is a presumption that in creating a business…

Q: What is the cornerstone of accounting ethics?

A: Introduction: Accounting ethics is a subset of applied ethics that is linked to business ethics and…

Q: Why are stakeholders important in accounting ethics?

A: Stakeholders' refers to the person(s) or a group who has some interest in a company and can be…

Q: Reported accounting earnings provide valuable information to investors, lenders and regulators.…

A: While most managers see executive compensation as immoral, managers who have worked in firms with…

Q: Why might one expect managers to act in shareholders' interests? Give some reasons.

A: Managers would act in shareholders’ interests as a result of they need a duty to act in their…

Q: What is Fair Value Accounting? What are the factors contributing toward the trend of fair value…

A: "Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: What is meant by “economic Consequences” in accounting standard-setting

A: Definition: Financial accounting standards board (FASB): This is the organization that creates,…

Q: Consider why earnings management is considered important by many managers and management teams.…

A: Answer:- Earnings management meaning:- Earnings management is the use of accounting practices to…

Q: activities need judgment in preparing the accounting earnings

A: Accounting earnings is the net income earned from conducting the business of the entity. It is…

Q: Examine the advantages and disadvantages of interpretative accounting theory

A: Introduction : Interpretive Accounting theory has developed and contributed significantly to our…

Q: Which theory predict the facts but not assume any particular outcome? O a. Normative theory O b.…

A: The question is multiple choice question. Required Choose the Correct option

Q: Discuss why ethics is important in the finance industry and examine how using an ethical framework…

A: The financial industry has given us countless scandals and news stories about professionals who have…

Q: How are financial accountants pressured when they need to make ethical decisions in their work? Is…

A: The GAAPs provide the guidelines on accounting policies to be followed in the preparation and…

Q: Why is ethical behavior important to business?

A: Ethics: Ethics is a system of acceptable beliefs to control behavior and activities that are…

Q: Describe earnings quality and how it is impacted by management practices to alter reported earnings.

A: Quality of earnings: It is referred to the amount of earning which is earned by higher sales or as a…

Q: how do compensation plans, including bonus structures, drive behavior?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A)Differentiate between traditional reporting and Integrated reporting. B) Evaluate earnings…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: ther positions can you think of that are related to financial m

A: Introduction : In simple words, financial management relates to the operations with regard to…

Q: Why does the Accounting system used for financial statement preparation not always provide the…

A: Management needs detailed information for making a decision. Many times accounting systems do not…

Q: Using earning management concept,

A: Answer : The revenue recognition principle is a cornerstone of accrual accounting together with the…

Q: Why is pro forma earnings reporting coming under scrutiny? How can you mitigate the "bad press"…

A: Pro forma earnings reporting refers to those financial statements that have hypothetical amounts as…

Q: Explain why it is difficult for researchers to convincingly document earnings management.

Q: Explain why the information produced by the management accountant must be concerned with the future…

A: Management accounting is that branch of accounting which helps in decision making with the help of…

Q: Explain the links between stock price, intrinsic value, and executive compensation

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: which manner the manager behave when choosing a particular accounting method to increase the…

A: Earnings management can be defined as the accounting method in order to depict a positive view in…

Question

Evaluate earnings management from a utilitarian perspective. Can earnings management be an ethical practice? Discuss why or why not.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Earnings Quality, Measurement and Management

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is the difference between earnings management and earnings manipulation?
Which of the following is true about earnings management? A. It works within the constraints of GAAP. B. It works outside the constraints of GAAP. C. It tries to improve stakeholders views of the companys financial position. D. Both B and C E. Both A and C
What are the key differences between financial accounting and managerial accounting?
What is business ethics? Is it possible to teach ethical behavior in a management accounting course?
Is there a way to prevent managers from focusing on accounting measures as performance measures?
Analyze and discuss when earnings management may be an ethical practice and when it is an unethical practice.
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.”
Evaluate the following statement: Do the ends of positive organizational consequences justify the means of earnings management?
Define the phrase “earnings management.” Under what conditions, if any, is earnings management acceptable? Do auditors’ responsibilities include actively searching for instances of earnings management by clients? Defend your answers.
Discuss the concept of earnings management and its ethical implications in financial reporting. What are some common techniques used in earnings management, and how do they affect the quality and transparency of financial statements?
Discuss how earnings management is used as a tool to reduce sensitivity to political pressure.
Explain the links between stock price, intrinsic value, and executive compensation Discuss the importance of business ethics and the consequences of unethical behavior.