The Following Is a Definition of Earnings Management

Essay

The following is a definition of earnings management:
"Earnings management is recognized as attempts by management to influence or manipulate reported earnings by using specific accounting methods (or changing methods), recognizing one-time non-recurring items, deferring or accelerating expense or revenue transactions, or using other methods designed to influence short-term earnings." Explain what is meant by this statement in the context of the discussion in the chapter.
[This statement comes from an excellent article on the issue titled "Earnings Management and its Implications." You may want to discuss parts of the article with your students. The article can be found at: http://www.nysscpa.org/cpajournal/2007/807/essentials/p64.htm]