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Unformatted text preview: by changing accounting methods, recognizing one-time items, or deferring expenses or accelerating revenues to bring about desired short-term earnings results. On the contrary, when earnings are managed so that financial statements do not reflect the economic health of the company accurately, External users may make improper decisions they otherwise would not have made. Because of its distorting effects, the public interest is impaired. Thus, helping clients manage their reported earning and financial condition can be labeled as an ethical behavior for a CPA or CPA firm. Akers, M., Bellovary, J., & Giancomino, D., (2007), Earnings Management and Its Implications: Educating the accounting profession. Retrieved from www.nysscpa.org/cpajournal/2007/807/ essentials/p64.htm...
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- Fall '10