Which of the Following Authors(s) Link Earnings Management to Choices

question 58

Multiple Choice

Which of the following authors(s) link earnings management to choices made in determining earnings that may comprise aggressive, but acceptable, accounting estimates and judgments, as compared to fraudulent practices that are clearly intended to deceive others?

• A) Dechow and Skinner
• B) Healy and Wahlen
• C) Schipper
• D) Thomas E. McKee

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Definitions:

Optimising Decisions

Making choices that lead to the best possible outcome, considering all available information and constraints.

Satisficing Decisions

Choose the first satisfactory alternative that comes to your attention.

Behavioural Decision Model

An approach to understanding decision-making, focusing on how individuals interpret and respond to information based on psychological and behavioural factors.

Bounded Rationality

A concept that decision-makers are limited in their decision-making capabilities by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions.