Lecture 13 Earnings Management

Lecture 13 Earnings Management - LECTURE 13 EARNINGS...

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LECTURE 13 EARNINGS MANAGEMENT MGCR 211
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What is Earnings Management Accounting is not always black and white Remember that we said accounting standards need to be interpreted You often have choices for accounting policies Sometimes you will also be in a specific situation where there is no accounting guidance Earnings management occurs when
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What is Earnings Management Management, BOD and Auditors are supposed to act in the best interest of the shareholders. However, often have own personal agenda which is in conflict with the best interest of shareholders Accounting decisions are sometimes based on factors other than best interest of shareholders. Be careful, Earnings management is not
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Earnings Management’s Presence Earnings management can be present in E Income statement E Balance sheet E Cash flow statement
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Earnings Management & FS Analysis Earnings management decision will be influenced by the objective of management E A more precise objective can be:
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Lecture 13 Earnings Management - LECTURE 13 EARNINGS...

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