Recent Research on the Manipulation of Profit Numbers by Managers

question 13

Multiple Choice

Recent research on the manipulation of profit numbers by managers with a view to influencing share price has shown:

• A) no evidence of manipulation
• B) firms reporting continuous growth are priced at a discount to other firms
• C) reporting of small losses is rare and reporting of small profits fairly common
• D) none of the above

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Definitions:

Composite Units

A measure used in cost accounting for aggregating the cost of similar items or processes into a single figure.

Fixed Costs

Financial obligations like rent, salaries, and insurance premiums that do not fluctuate with changes in production or sales levels.

Sales Data

Information and statistics related to the sale of goods and services, used by businesses to analyze performance, forecast trends, and make strategic decisions.

Composite Unit

A measurement representing a combination of different but related items, often used in production or inventory management to simplify tracking and analysis.