Earnings Management

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  • Earnings Management

    1158 Words  | 5 Pages

    and Jodi L. Bellovary, earnings management is defined as; “Earnings management is recognized as attempts by management to influence or manipulate reported earnings by using specific accounting methods (or changing methods), recognizing one-time non-recurring items, deferring or accelerating expense or revenue transactions, or using other methods designed to influence short-term earnings.” This definition tries to explain that managers have the control to influence the earnings and report them in a

  • Earnings Management

    1019 Words  | 5 Pages

    evidences of managers manipulating the earnings for various reasons. “Earnings management is the choice by a manager of accounting policies, or real actions, affecting earnings so as to achieve some specific reported earnings objective” (Scott, 2012, p. 423). Managers play an important role in the company because they have control over the accounting policies, thus, the managers can manipulate the income. There are different viewpoints about earnings management. Some people think it will protect

  • Earnings Management In Accounting

    2616 Words  | 11 Pages

    Introduction Earnings management is a popular project that studied by fields of both economy and accounting. Although the concept of earnings management is still controversial in the accounting fields, the basic purpose can be concluded from the two authority definitions by Scott (n.d.) and Schipper (n.d.). According to Scott (n.d.), a scholar of accounting in America, earnings management refers to the behaviors that allowed by GAAP standard, maximizing the self-interest of managers or the enterprise

  • Essay On Earnings Management

    868 Words  | 4 Pages

    The main basis of this definition involves the interests of management towards stakeholders and contractual outcomes. Earnings management decisions rely on the intent of the managers, which can include reflecting the financial results positively to investors or for the firm to meet contractual obligations. Earnings management is the manipulation, through a selection of accounting policies, to achieve a desired financial reporting result. Accruals can be classified as matching financial activities

  • Ethics of Earnings Management

    779 Words  | 4 Pages

    I enjoyed the conversation on GAAP and earnings management relating to the case “Be Careful What You Wish For: From the Middle”. The conversation was brief, but got me thinking on the ethics of earnings management. GAAP accounting is to reflect in good faith the company’s actual financial status and present reality as is. It is not to present a manipulated set of numbers that paint a pretty picture. GAAP requires recording of revenue when there is persuasive evidence of an arrangement, assurance

  • Ethics in Earnings Management

    1327 Words  | 6 Pages

    concern. With that goal in mind, management must continually report sustained or improved earnings to stakeholders to ensure constant and new investments in the company’s future (Geiger & van der Laan Smith, 2010). The pressure to report positive results can lead management to engage in earnings management activities to alter short-term results to meet the goals set forth (Geiger & van der Laan Smith, 2010). In addition to the pressures on company management, broad accounting principles introduce

  • Importance Of Earnings Management

    1087 Words  | 5 Pages

    Today’s World, earnings management can be defined simply as “an accounting process whereby managers manipulate reported earnings to obtain some private gain.” Most companies today take part in earnings management in order to maximize profits and stock value and reduce fluctuations. In the United States companies must comply with US Generally Accepted Accounting Principles; however, there is room for interpretation and judgment, which leads to earnings management. Although earnings management does not

  • Essay On Earnings Management

    524 Words  | 3 Pages

    1.1 Earnings Management Earnings management is “purposeful intervention by management in the earnings determination process usually to satisfy selfish objectives” (Subramanyam and Wild, 2009). Earnings management can be indicated by analyzing several indicators, such as, evaluating “the size and direction of discretionary accruals, reversals in subsequent accruals, the use of special items in the income statement, and adjustment of R&D spending” (Das, Shroff, and Zhang, 2007). There are still other

  • The Pros And Cons Of Earnings Management

    909 Words  | 4 Pages

    Earnings Management is the concept where through the use of accounting methods under the generally accepted accounting principles (GAAP) standard set by FASB, companies are able to skew the results on their financial statements to look more favorable, create a positive view of the company’s financial standing and operation. Paul Rosenfield, a CPA who was the director of the AICPA accounting standards, says that GAAP is a system that has two flaws in regard to earnings management; realization and

  • Supervise the Sensible Management of Financial Earnings

    759 Words  | 4 Pages

    stable financial position to obtain short-term investments. The Investopedia (2014), profit is from the surplus of stocks and bonds, which earn high-level dividends instead of a standard interest bearing account. “The Dangerous Morality of Managing Earnings,” illustrates the direction of ethical behavior of corporate managers to influence financial statements to benefit managers or the organization (Bruns & Merchant, 1990, pp.1). The belief of the participants is bending the rules of business methods