Course: FINANCIAL STATEMENT ANALYSIS
(RESEARCH ASSIGNMENT)
The report should be around 2-3 pages. Note that the contents page, list of references and any report appendices are not included in the page count.
EARNINGS MANAGEMENT
The propensity of managers to bolster/manage earnings by exploiting the flexibility in GAAP or by resorting to financial fraud led former SEC Chairman Arthur Levitt to warn:
Arthur Levitt’s full speech, “The Numbers Game,” is available on the SEC’s website at https://www.sec.gov/news/speech/speecharchive/1998/spch220.txt
Required:
Read the speech, and then answer the following questions.
1) Briefly explain what motivations Levitt discusses for earnings management.
2) What specific techniques for earnings management does Levitt discuss?
3) According to Levitt, why is the issue of earnings management important?
4) Use at least one reference from https://scholar.google.com/ , regarding earnings management.
Research Assignment Assessment Rubric:
