Question: In Arthur Levitt s speech that was referred to in the
In Arthur Levitt’s speech that was referred to in the opening quote he also said: “.I fear that we are witnessing an erosion in the quality of earnings, and therefore, the quality of financial reporting. Managing may be giving way to manipulation; Integrity may be losing out to illusion.” Explain what you think Levitt meant by this statement. What role do financial analysts’ earnings expectations play in the quality of earnings?
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