timer Asked: Jul 4th, 2013
account_balance_wallet $15

Question description

Companies often try to keep accounting earnings growing at a relatively steady pace,
thereby avoiding large swings in earnings from period to period. They also try
to meet earnings targets. To do so, they use a variety of tactics. The simplest
way to control the timing of accounting revenues and costs, which all firms can
do to at least some extent. For example, if earnings are looking too low this
quarter, then some accounting costs can be deferred until next quarter. This
practice is called "earnings management". It is common, and it raises
a lot of questions. Why do firms do it? Why are firms even allowed to do it
under GAAP? Is it ethical? What are the implications for cash flow and
shareholder wealth?





Tutor Answer

School: Duke University

flag Report DMCA

Awesome! Exactly what I wanted.

Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors