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Managers smooth earnings in an attempt to just reach wall street expectations. If they soar beyond expectations the managers are only raising the bar that much higher for themselves in the next fiscal quarter/year. In addition, a company that can show constant steady earnings is going to increase shareholder value in that investors will see the corporation as a safe choice. It also looks smarter on the companies behalf if they are able to maintain constant success.

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Q: Why managers wants to manage earnings?
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