This course provides an overview of earnings managementtechniques and their ethical implications. This course covers basics like revenue recognitiontiming, expense manipulation, provisionadjustments, income smoothing, and cost-cutting. This course also addresses more advanced methods such as financial engineering, tax planning, big bath accounting, accounting policy changes, and round-trip transactions. Throughout this course, the ethical considerations inherent in these techniques are addressed through a series of example situations.
Learning Objectives
Upon successful completion of this course, participants will be able to:
Identify different methods of revenue recognition timing used in earnings management
Recognize examples of expense manipulation in financial reporting
Distinguish between provision and reserve manipulation techniques
Determine the impact of asset valuation adjustments on reported financial performance
Differentiate between income smoothing strategies and their effects on financial statements
Identify financial engineering techniques in advanced earnings management
Distinguish legitimate tax planning from earnings management strategies
Determine the impact of big bath accounting on financial reporting
Differentiate permissible changes in accounting policies from manipulative adjustments
Recognize risks associated with round-trip transactions in earnings management
Major Topics
Revenue Recognition Timing
Financial Engineering
Tax Planning
Big Bath Accounting
Accounting Policy Changes
Round-Trip Transactions
Income Smoothing
Cost-Cutting Timing
