The corporate disclosure practice will help all the stakeholders to understand and measure business operation.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 recognized and how such transactions and events are measured.
Requirement:
1) Using earning management concept, discuss why the timing of recognizing events that impact
income, revenue or profit, or expenses are important for managers?

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