The practice of managing earnings is using accounting methods to create financial statements that unduly favourably portray a company’s operations and financial standing. The management of a corporation must make decisions in order to comply with many accounting regulations and principles. Earnings management manipulates financial accounts to exaggerate or “smooth” earnings by taking advantage of how accounting rules are applied.
Earnings management is a technique used in accounting to enhance the image of the company’s financial situation. Companies employ earnings management to disguise variations in earnings and give the impression of steady profitability. Using an accounting technique that results in better short-term profits is one of the most common ways to alter financial records.
The practice of managing earnings is using accounting methods to create financial statements that unduly favourably portray a company’s operations and financial standing. The management of a corporation must make decisions in order to comply with many accounting regulations and principles. Earnings management manipulates financial accounts to exaggerate or “smooth” earnings by taking advantage of how accounting rules are applied.
Earnings management is a technique used in accounting to enhance the image of the company’s financial situation.
Companies employ earnings management to disguise variations in earnings and give the impression of steady profitability. Using an accounting technique that results in better short-term profits is one of the most common ways to alter financial records.
