Which of the Following Best Defines the Term Earnings Management

question 16

Multiple Choice

Which of the following best defines the term earnings management?

• A) It is the intervention by the management in the internal financial reporting process, with the intent of boosting the earnings of an organization.
• B) It is the purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain.
• C) It is the legitimate alteration of internal reports by the management to influence contractual outcomes that depend on reported accounting numbers.
• D) It is a systematic management of earnings of an organization by its external shareholders, with the intent of increasing future profits.