he corporate disclosure practice will help all the stakeholders to understand and measure business operation. Annual financial statement and particularly income statement is one of the most important ones. However, a company's reported profits will be impacted by different factors, including when particular transactions and events are recognised and how such transactions and events are measured. 1) Using earning management concept, discuss why the timing of recognising events that impact income, revenue or profit or expenses are important for managers?

Contemporary Auditing
11th Edition
ISBN:9781337650380
Author:KNAPP
Publisher:KNAPP
Chapter4: Ethical Responsibilities Of Accountants
Section4.8: Dell Inc.
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The corporate disclosure practice will help all the stakeholders to understand and measure business
operation. Annual financial statement and particularly income statement is one of the most important ones.
However, a company's reported profits will be impacted by different factors, including when particular
transactions and events are recognised and how such transactions and events are measured.

1) Using earning management concept, discuss why the timing of recognising events that impact
income, revenue or profit or expenses are important for managers?

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