Many maintain that earnings management is harmful. This literature study explains and describe the issue from the outside perspective of earnings management. This research Â method Â used Â qualitative Â with Â literature Â study. The Â results Â of Â this Â study Â are Earnings management is not a fraud. Fraud is an âact of criminal deceptionâ or a âdeceitful Â behavior Â which Â may Â be Â punished Â by Â lawâ. Â Earnings Â management Â is within legitimate constraints, implying that the deviation of reported earnings from underlying Â or Â economic Â earnings Â due Â to Â earnings Â management Â is Â legitimate Â or authorized by accounting standards Â and corporate laws. Â The results of this study contribute Â as Â add Â toÂ the Â treasury Â of Â financial Â accountingÂ literature, Â especially accounting Â theory. Â The Â results Â of Â this Â research Â have Â important Â implication Â for regulators Â and Â lawmakers. Â Regulators Â tend Â to Â regard Â earnings Â management Â as harmful and in the need of immediate remedial action.
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