Accounting techniques

Discussion Question 1: Most accountants, CEOs, and CFOs agree that it is unethical to manage earnings using accounting techniques that violate GAAP or are misleading. However, there is not a unified opinion about whether or not it’s unethical to manage earnings using management operations—for example, performing maintenance ahead of schedule in order to smooth earnings. (see http://college.cengage.com/accounting/resources/st… and http://www.insead.edu/facultyresearch/areas/accounting/events/documents/Bartonetal2010.pdf). Do you think it is ethical to smooth earnings by waiting to sell an asset at a profit or by performing an activity to recognize expenses sooner?

o Discussion Question 2: The SEC accused Xerox of committing financial statement fraud in order “to polish its reputation on Wall Street and to boost the company’s stock price” (https://www.sec.gov/news/press/2003-70.htm). What ethical system do you think was being used by Xerox’s management?

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