What Are Some Ways in Which Earnings Management on Construction

question 85

Multiple Choice

What are some ways in which earnings management on construction contracts can be minimized?

• A)Determining the degree of completion in a manner that best represents the underlying performance of the project.
• B)Judiciously making estimates for the cost-to-cost approach that maximize earnings in the current year.
• C)Underestimating future costs.
• D)Not using engineering estimates or the cost-to-cost approach.

---

Definitions:

Unstructured

Refers to data or information that doesn't have a pre-defined model or organization, making it difficult to process and analyze without specialized tools.

Unicorn

In a business context, a unicorn refers to a privately held startup company valued at over $1 billion.

Business Models

Structural frameworks used by organizations to operate, generate revenue, and deliver value to customers.

Information System

Organized method for collecting, storing, and communicating past, present, and projected information on internal operations and external intelligence.