Management has some latitude to manage earnings as long as the choices are considered ____________, however,...
Management has some latitude to manage earnings as long as the choices are considered ____________, however, any sign of deliberate efforts to do so should be considered a red flag by auditors, because it can be fraud, whether or not material.
A. Reasonable by investors
B. Necessary to achieve performance bonuses
C. GAAP-compliant
D. Board approved
Homework Answers
Management has some latitude to manage earnings as long as the choices are considered GAAP-Compliant , however, any sign of deliberate efforts to do so should be considered a red flag by auditors, because it can be fraud, whether or not material.
Correct answer is option C .( i.e. GAAP-Compliant )
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