Earnings Management Can Be Defined as the "Purposeful Intervention by Management

question 45

Essay

Earnings management can be defined as the "purposeful intervention by management in the earnings process, usually to satisfy selfish objectives" (Schipper, 1989).Earnings management techniques can be separated into those that are "cosmetic" (without cash flow consequences) and those that are "real" (with cash flow consequences).The management of a company wishes to increase earnings this period.List three "cosmetic" and three "real" techniques that can be used to achieve this objective and explain why they will achieve the objective.

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Definitions:

Calcium Ions

Positively charged atoms of calcium that play crucial roles in various biological processes, including muscle contraction, nerve function, and blood clotting.

Teeth Blood Supply

The vascular system that provides nutrients and oxygen through the arteries and veins to maintain the health of teeth and support their function.

Lingual Artery

An artery that supplies blood to the tongue, crucial for its movements and function.

Maxillary

Pertaining to the maxilla, the upper jawbone in most vertebrates, including humans, that holds the upper teeth and plays a crucial role in forming the structure of the face.