Internal Earnings Targets Represent an Important Tool in Motivating Managers

question 45

Essay

Internal earnings targets represent an important tool in motivating managers to increase sales efforts,control costs,and use resources more efficiently.Such internal targets also can cause managers to resort to extreme measures in order to meet goals established by upper management.Earnings management often appears in a variety of forms as a means of reaching these internal goals.
Earnings management also is associated with earnings-based internal bonus plans which are also a form of internal target.
Explain how earnings management is related to earnings-based internal bonus plans and how managers behave in response to such plans.

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Definitions:

Epidermis

The outermost layer of skin that provides a waterproof barrier and creates our skin tone, serving as the body's primary defense against the environment.

Stratum Lucidum

Clear layer of the epidermis found in thick skin between the stratum granulosum and the stratum corneum.

Epidermis

The outermost layer of skin, providing a waterproof barrier and creating skin tone.

Keratohyalin

Nonmembrane-bound protein granule in the cytoplasm of stratum granulosum cells of the epidermis.