{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ACC301-ch06 - chapter 6 chapter Earnings Management An...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Earnings  Earnings  Management Management An electronic presentation An electronic presentation by Douglas Cloud by Douglas Cloud Pepperdine University Pepperdine University chapter chapter   6 6
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 1. Identify the factors that motivate earnings management. 2. List the common techniques used to manage earnings. 3. Critically discuss whether a company should manage its earnings. Learning Objectives Continued Continued
Image of page 2
3 4. Describe the common elements of an earnings management meltdown. 5. Explain how good accounting standards and ethical behavior by accountants lower the cost of obtaining capital . Learning Objectives
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4 Motivation for Earning Management Forces pushing managers to manipulate results: 1. Meet internal targets. 2. Meet external expectations. 3. Provide income smoothing. 4. Provide window dressing for an IPO or a loan.
Image of page 4
5 Motivation for Earning Management Internal earnings targets represent an important tool in motivating manager to increase sales efforts, control costs, and use resources more efficiently.
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6 Meet Internal Targets Meet Internal Targets Motivation for Earning Management There is a tendency for the person being evaluated to forget the economic factors underlying the measurement and instead focus on the measured number itself. Performance
Image of page 6
7 Motivation for Earning Management Meet External Expectations Meet External Expectations Employees and customers want a company to do well so that it can survive for a long run and make good on its long-term pension and warranty obligations.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
8 Motivation for Earning Management Meet External Expectations Meet External Expectations Suppliers want assurance that they will receive payment and that the purchasing company will be a reliable purchaser for many years into the future.
Image of page 8
9
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern