about earnings management: as an opportunistic behaviour by managers to maximize their utility and from an efficient contracting perspective. Issues arise in regards to earnings management due to the choice of accounting policies, discretionary accruals, and finally the line where management becomes mismanagement. 11.2 Evidence of Earnings Management for Bonus Purposes In 1985 earnings management was researched to see if managers would manage net income so as to maximize their bonuses under
Words: 6283 - Pages: 26
CHAPTER 4 Posted with permission from John Wiley & Sons Canada, Ltd. Reporting Financial Performance ASSIGNMENT CLASSIFICATION TABLE | |Brief Exercises | | |Writing Assignments | |Topics | |Exercises |Problems | | | |Income measurement concepts. | |
Words: 19406 - Pages: 78
book income? Generally, Sec. 446 requires taxable income to be computed under the same method of accounting as the taxpayer uses for its books. However there are differences in the accounting method used for GAAP versus tax....this could be cash method vs. accrual method, depreciation methods, expenses disallowed for tax but recorded in books and so on. Reconciliation of taxable income to book helps to quantify how much of the aggregate book-tax differences
Words: 1618 - Pages: 7
CHAPTER 23 Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) | | |Brief Exercises | | | Concepts for | |Topics |Questions | |Exercises |Problems |Analysis | |1. |Format, objectives purpose, and source |1, 2, 7, |
Words: 18705 - Pages: 75
THE ACCOUNTING REVIEW Vol. 77 Supplement 2002 pp. 107–114 DISCUSSION OF The Relation between Auditors’ Fees for Nonaudit Services and Earnings Management William R. Kinney, Jr. The University of Texas at Austin Robert Libby Cornell University I. INTRODUCTION rankel et al. (2002) (hereafter FJN) present a timely paper using a new data set to test several propositions, including one suggested by the Securities and Exchange Commission (SEC) about the relation between nonaudit fees
Words: 3624 - Pages: 15
other asset groups. The ship generates its own cash flows. In the current operating year, pirates have entered the area where the cruise ship operates. As a result of this incursion, the ship experienced thirty percent lower cash flows of $1.0 million in the current year. The company does not anticipate this will change in the near-term. This change may require the company to consider an impairment loss on the asset since the fair value (future cash flows) does not exceed the carrying cost of the
Words: 2420 - Pages: 10
| |wide range of users. | |Underlying assumptions|Although it recognizes, but not given much |Give importance to accrual and going | | | |prominence is given to accrual and going concern |concern basis | | | |basis. In fact going concern assumption is not |
Words: 3962 - Pages: 16
ANNUAL REPORt 2011 Johnson & Johnson will continue to bring meaningful innovations to people around the world so they can live better and healthier lives. We are deeply committed and dedicated to the people who use our products, our employees, the communities in which we live and work, and you, our shareholders. Most important, we will never lose sight of who we are. ON tHE COVER Matt Cox, who has type 1 diabetes and uses the waterproof ANIMAS® VIBE™ insulin pump, swam an English Channel
Words: 55630 - Pages: 223
PART 5 CASES CASE 1 Robin Hood C1 CASE 2 The Movie Industry in 2008 (Case A) C3 CASE 17 Merck: Open for Innovation? C228 CASE 3 The Movie Industry in 2011 (Case B) C11 CASE 18 LEGO Group: An Outsourcing Journey C249 CASE 4 Better World Books: Social Entrepreneurship and the Triple Bottom Line C18 CASE 16 IBM and the Emerging CloudComputing Industry C207 CASE 19 healthymagination at GE C261 CASE 20 Siemens Energy: How to Engineer a Green Future? C281 CASE 5 Tesla Motors and the U.S. Auto
Words: 5368 - Pages: 22
these answer choices are correct. 5. A loss on impairment of an intangible asset is the difference between the asset’s a. carrying amount and the expected future net cash flows. (triggers impairment) b. carrying amount and its fair value. (calculate the impairment loss) c. fair value and the expected future net cash flows. d. book value and its fair value. 6. When a patent is amortized, the credit is usually made to a. the Patents account. b. an Accumulated Amortization account(accumulated
Words: 4215 - Pages: 17
