Why are some managers motivated to manipulate amounts reported in the financial statements?

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: What is management’s responsibility for reporting on internal control over financial reporting?

A: Internal control is a mechanism or procedure that the company implements so that the integrity of…

Q: how will a change from cash basis accounting to accural basis accounting positively and negatively…

A: Books of accounts can be maintained either using the cash basis accounting or using the accrual…

Q: How are financial accountants challenged in their work to make ethical decisions? Is technical…

A: Ethical behavior implies taking such actions which are not only as per laws but also confirm to…

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, not the accountants, prepares a company's financial statements. Think what what this…

A: The answer :

Q: What is an externality, and why do financial accounting practices typically ignore externalities?

A: Externality is the benefit or the cost caused through the producer that is not incurred financially…

Q: “Management accounting should not fit the straitjacket of financial accounting.” Explain and givean…

A: Financial accounting is concerned primarily with the financial data related to an organization…

Q: How does earnings management channel stuffing impact financial statements

A:

Q: Describe some of the motives and mistakes made by the financial engineers?

A: Motives of financial engineers are discussed as follows: Financial engineers use quantitative…

Q: What is information asemmytry? Why is it considered a problem to the financial system?

A: Information asymmetry is simply the imbalance of information between the trade participants i.e. one…

Q: Why is financial management important to an organization?

A: Financial Management: Financial management relates to the strategic preparation, organizing,…

Q: Which is correct about financial information? a. Financial information’s purpose is only to comply…

A: a. Financial information’s purpose is only to comply with needs of external users such as the…

Q: How is financial accounting different frommanagement accounting?

A: The financial accounting and the management accounting are used for taking decisions for the…

Q: What are the ethical and legal implications of using accounting practices such as the book-and-hold…

A: Corporate earnings are the profits of a corporation after all expenditures have been paid. Earnings…

Q: What key issues must managers face in the financial distress process?

A: Financial distress happens when revenues or income and no longer meet or pay for the financial…

Q: What are the advantages of regulation of financial reporting?

A: Financial reporting refers to the disclosing of communicating the financial statements to the…

Q: How do the subject matter of reports and the verification of reports differ between financial…

A: Both financial and managerial reporting have different scope and objectives .Detail explanation…

Q: It has been suggested that not all accounting choices are made by management in the best interest of…

A:

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: What are opportunity costs? Explain why opportunity costs are not recorded in financial accounting…

A: Opportunity cost is the value or benefit of the next best alternative given up when making a choice.…

Q: Is there a distinction between management and financial accounting?

A: Accounting refers to a process through which all day-to-day activities or transactions occurred or…

Q: How does earnings management affect earnings quality?

A: Earnings of a company is referred as net income or bottom line item of a company. It is a very…

Q: How does accounting software and financial analysis software make the financial executive more…

A: Accounting software and financial analysis software are used by professionals to record, summarize…

Q: Explain when and why the users of financial statements are not able to detect earnings management.

A: Earning management means making the financial statement as per managements requirements and…

Q: Test your knowledge • The role of management accounting does not normally include the function of •…

A: Management accounting is a form of accounting under which financial information and financial…

Q: Explain how management accounting should not fit the straitjacket of financial accounting.

A: Definition: Management accounting is concerned with the financial and non-financial data that help…

Q: When do firms manage earnings in their reports?

A: Earnings are profits of a company. investors and analysts look to earnings to determine the…

Q: Comment on the statement that what a company’s income statement reveals is interesting, but what it…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Which of the following activities is associated with the management accounting information system?…

A: The Question has covered the concept of Cost of Quality. The Cost of Quality is a method of measures…

Q: Explain the difference between earnings management and financial statement fraud.

A: Definition: Fraud: It refers to the intentional misrepresentation of the financial information or…

Q: explain why financial management is a difficult task within an organisation, and give examples as…

A: For any company or organization financial management remains one of the most important and vital…

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: Why is a system of internal control not able  to overcome collusion by employees?

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Use the opportunistic perspective of PAT to explain the potential for managers to manipulate…

A: SOLUTION- POSITIVE ACCOUNTING THEORY (PAT) PREDICTS THAT PROCESSES CAN BE PLACED IN PLACE ON AN…

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

A:

Q: Managerial accounting focuses on historical information while financial accounting focuses on the…

A: The above statement seems to be False

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: What are the conflicts between shareholders and managers

A: Shareholders are real owners of company as they hold proportion of common stock in company but due…

Q: What difficulties do differences in accounting standards create for investors?

A: Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…