0
What should accompany the income statement of a company using earnings management?
EncofBizandFinance
An income statement, enhanced by earnings management without adequate disclosure, may well be a fraudulent income statement.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What is the main motivations for companies to engage in earnings management?
Mainly to: 1.0 Ensure that the revenue stream is consistant with the cost structure, and so ensure that the company remains profitable 2.0 Analysis of the earnings will allow for the timeous implementation of plans, if the earnings fall 3.0 Earnings management also allows the company to check ratios such as price/earnings etc, so as to ensure investor interest in the company's shares
What is the difference between fraud and earnings management?
Both involve the intent, by reporting management, to distort their company's earnings picture, but fraudulent accounting does so by violating generally accepted accounting standards (GAAP) while earnings management does so within GAAP.
What is the statement of retains earning and what information does it provide?
The statement of retained earnings is a business statement that illustrates the total retained earnings by a company at the end of a period. Basically the statement starts with retained earnings from the previous period, then adds any gains (on investments) and subtracts any losses (dividends declared, goodwill, discontinued operations). You are then left with the retained earnings for the current period.
Describe a balance sheet income statement retained earnings statement and statement of cash flows How does a company use these financial sta?
To check on the financial position of the company eg: payables and receiveables
What role does mission statement play in strategic management of an organization?
The mission statement gives a written statement of the overall, broad goals of the company. The strategic management of the company ultimately helps the organization to reach their overall mission statement.
A company's founders or top management will express their vision in a mission statement?
mission statement
What is the base word of accompany?
Accompany
What is the simplest form of earnings management?
Perhaps the simplest way to manage earnings is to control the expense spigot. Even the most lean company can find discretionary expenses that can be trimmed to help meet the earnings target for a period.
Why did Arthur Burns say that companies use earnings management?
The management people running those companies try to meet the analysts' earnings projections to (i) maintain their credibility with the analyst community, and (ii) maintain the relative price of the company's stock.
Can you debit asset and credit Retained earnings?
Assets are increased with a debit and decreased by a credit. Retained earnings is a credit, as they are an owners equity account and increase with credit.Retained earnings is what a company has after all expenses and dividends (if applicable) are paid. Retained earnings is shown on the Statement of Retained Earnings and is a credit which increases OE.
What is the difference between accompany and company?
accompany-go with company- corporate organization, group of soldiers
Justify the Need for retained earnings in Financial Management?
Retained earnings represent what a company does with its profits. They are the amount of profit the company has reinvested in the business since its inception. Retained earnings reflect a company's dividend policy. They focus on evaluating which action generated or would generate the highest return for the shareholders. Comparison of retained earnings is difficult but generally most meaningful among companies of the same age and same industry. They act both as a measure of future investments and shareholders trust to the company.
