Laisani is studying earnings management among 100 large companies in Fiji. She developed the following regression...
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Laisani is studying earnings management among 100 large companies in Fiji. She developed the following regression model for the study: Y = ax₁ + bx₂ + CX3 + dx4 +ex5 where X1 = Credit Sales, X2 = PP&E, X3 = Inventory, X4 = Staffing Costs, X5 = Industry and a, b, c, d and e represent the coefficients Required a) Briefly outline why Laisani may have included credit sales, PP&E and inventory in the model b) Briefly outline whether Laisani's study adopts a scientific or naturalistic approach c) Explain how Laisani could use the model to identify whether a particular firm is practicing earnings management d) Briefly outline another type of earnings management apart from the one being studied in this model e) Laisani found that one company "took a bath" in the last financial period. Use relevant examples to explain how and why the firm may have done so f) Use agency theory to distinguish between the dividend retention problem and the excessive dividend problem Laisani is studying earnings management among 100 large companies in Fiji. She developed the following regression model for the study: Y = ax₁ + bx₂ + CX3 + dx4 +ex5 where X1 = Credit Sales, X2 = PP&E, X3 = Inventory, X4 = Staffing Costs, X5 = Industry and a, b, c, d and e represent the coefficients Required a) Briefly outline why Laisani may have included credit sales, PP&E and inventory in the model b) Briefly outline whether Laisani's study adopts a scientific or naturalistic approach c) Explain how Laisani could use the model to identify whether a particular firm is practicing earnings management d) Briefly outline another type of earnings management apart from the one being studied in this model e) Laisani found that one company "took a bath" in the last financial period. Use relevant examples to explain how and why the firm may have done so f) Use agency theory to distinguish between the dividend retention problem and the excessive dividend problem
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a Laisani may have included credit sales PPE and inventory in the model as these variables could be indicative of a companys financial health and perf... View the full answer
Related Book For
Statistics For Business And Economics
ISBN: 9780538481649
11th Edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams
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