Income is a decrease of 160000 200000 40000 according

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income is a decrease of $160,000 ($200,000 – 40,000). According to Macintosh, “profit manipulation (income smoothing) is where managers of business components of large, multi- divisional, meganational enterprises make self-beneficial choices of accounting methods as well as taking actions to influence economic events which impact on reported profits (1995).” Since Moncrief does not plan to sell the units until 2017, the only logical reason for purchasing more
Ethics Case 8-7 2/17/16 costly inventory at year-end is profit manipulation (income smoothing). Requirement 2: Discuss the ethical dilemma Moncrief faces in determining whether or not the additional units should be purchased.
Ethics Case 8-7 2/17/16 doi: 10.1006/cpac.1995.1027 Lambert, C. & Sponem, S. (2005). Corporate governance and profit manipulation. Critical Perspectives on Accounting, 16 (6), 717-748. doi.org/10.1016/j.cpa.2003.08.008

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