The Majority of Managers Surveyed Say It’s Not Wrong to Manage Earnings Occasionally, the morals and ethics executives use to manage their businesses are examined and discussed. Unfortunately, the morals that guide the timing of nonoperating events and choices of accounting policies have largely been ignored.
a. Time, laws, regulation, and professional standards have restricted accounting practices to those that are moral, ethical, fair, and precise. Comment.
b. Most managers surveyed had a conservative, strict interpretation of what is moral or ethical in financial reporting. Comment.
c. The managers surveyed exhibited a surprising agreement as to what constitutes an ethical or unethical practice. Comment.
d. List the five generalizations from the findings in this study relating to managing earnings.
e. Comment on management’s ability to manage earnings in the long run by influencing financial accounting.