Earnings Management

Discussion: Earnings Management
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Discussion: Earnings Management
Earnings management refers to the practice of manipulating a company's financial statements to either increase or decrease earnings in order to meet certain targets or expectations. While some forms of earnings management may be legal and acceptable, others may be considered unethical or even illegal. Proper reporting of earnings management is essential to maintaining transparency and integrity in financial reporting (Gonçalves, Gaio, & Ferro, 2021). Ethics plays a crucial role in reporting earnings management. Companies that engage in unethical or illegal earnings management practices not only risk legal repercussions, but also damage their reputation and erode trust among investors, stakeholders, and the public. It is important for companies to adhere to ethical principles and values when reporting earnings, as this helps to ensure that financial reporting is transparent, accur...