1. What is earnings management? The companies use earnings management as a strategy by which they can easily control and manipulate their earnings to reach their pre-determined earning target. 2. Why do companies employ earnings management techniques? Accountants cannot predict every business structure‚ every new and innovative transaction. Therefore‚ they build up principles that allow for flexibility so that they can adapt to changing circumstances. However‚ people make use of that flexibility
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Earnings Management and Its Implications Educating the Accounting Profession By Michael D. Akers‚ Don E. Giacomino‚ and Jodi L. Bellovary August 2007 Issue AUGUST 2007 - In the wake of continuing‚ highly publicized E-mail Story financial frauds and failures‚ the accounting profession has placed renewed emphasis on issues related to earnings Print Story management and earnings quality. The SEC and the public are demanding greater assurance about the quality of earnings. Staff Accounting Bulletin
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Stable Money Makers - Alpaca Business Betty Parks‚ a 49 year old building code auditor‚ became frustrated as she watched her retirement investment in a 401K move in the wrong direction. Specifically‚ Betty lost approximately 50% of her investment in the 401K‚ she had planned to use for retirement. After three years of research‚ Betty decided to make an unconventional investment of $56‚000 in tangible assets‚ the Alpacas. Fortunately for her‚ she had two new alpaca babies at the end of the first
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and contrast Accrual Earnings Management and Real Earnings Management. Real Earnings Management: a. Real activities manipulation: managers try to mislead at least some of their stakeholders to believe that the financial reporting goals have been met through normal operational practices. However‚ this is not a value added activity‚ sometimes may even reduce firm value because current actions will have negative effect on future cash flow. b. It is probable that real earnings management will have
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Abstract A quality of earning assessment is a tool used by analyst to determine the correlation between accounting income and economic income. The techniques to analyze accounting income and economic income include: comparing accounting principles‚ reviewing changes in accounting principles‚ analyzing discretionary and warranty expenditures‚ understanding replacement cost of assets and managements and auditors opinion of the company. A quality of earnings assessment of PepsiCo is applied to
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EPS Accounting Report: Development and Problems Earnings per share is the portion of a company’s profit allocated to each outstanding share of common stock. The computation of earnings per share is income minus preferred stock dividends divided by weighted average number of shares of common stock outstanding at the end of the period. Earning per share is considered to be the single most important metric to determine a company’s profitability which is crucial to the decision making of potential
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Blurring the ’Male Gaze’ "Gentlemen Prefer Blondes" is a 1953 Musical-Comedy released by 20th Century Fox‚ directed by Howard Hawks and starring Marilyn Munroe and Jane Russell; the two greatest sex symbols of the era. The camera’s point of view is that of the ’male gaze’‚ where women are regarded as objects of fascination and the men are assumed to have a position of power. Hawks shows how it can be easily hijacked by females smart enough to control‚ manipulate and ultimately blur the ’male gaze’
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When it was written in 1925‚ Gentlemen Prefer Blondes‚ by Anita Loos was heralded as a tremendous novel. It was seen as cutting edge and insightful‚ yet somewhat risqué in its portrayal of Lorelei Lee and her escapades. I can see how this may have been thought at that time‚ seeing as how women were looked at in such a different way then they are currently. The fact that a women with as little know-how as Lorelei can manipulate men the way that she does‚ leaves no question as to who is the superior
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reported earnings and the reasons behind each way may be different. (1) Report lower earnings. Managers intend to report lower earnings for mainly three reasons. Firstly‚ they want to hide profit for future use. In some years‚ the company presents a strong performance and has earned huge profit; however the manager may worry that the company’s future performance would not be as strong as current year‚ which gives them the incentive to save the profit by reporting a managed lower earning‚ so that
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UNIVERSITY OF GHANA BUSINESS SCHOOL MBA: ACCOUTING THEORY 1 – (ADMN 631) LECTURE: JAMES KWAME OTIEKU A PRESENTATION ON EARNINGS MANAGEMENT AND EXECUTIVE COMPENSATION BY EMMANUEL MENSAH ID NO: 10328957 AND PETER OPATA NYAKO ID NO: 10329653 1st October 2009 EARNINGS MANAGEMENT AND EXECUTIVE COMPENSATION Introduction Accounting standards define the accounting language that management uses to communicate with the firm’s external stakeholders. By creating a framework
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