Earnings Management
Discussion – The answer should not be too long
Companies that are publicly traded may engage in “earnings management” by manipulating their financial numbers in order to meet Wall Street estimates and present more favorable results. Discuss how a strong corporate-governance environment can prevent this from happening. Explain your ideas in your initial post. Then agree or disagree with at least two other posts by your classmates, and explain why.
…………………..Answer preview…………………..
Agree, companies may engage in “Earnings management” by manipulating financial reports to portray to exceed the street estimates and appreciate the price of its stock. Nevertheless, strong corporate governance may prevent the manipulation through(Chi-keung Man & Wong, 2013):
A large board with diverse knowledge- A large board with corporate and financial expertise will have a higher degree of independence. It will enable proper monitoring of top management activities concerning earnings…………………….
APA
198 words
198 words
