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.

Requirement:

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

Answer rating: 100% (QA)

Importance of timing of recognition of events by management using earning management concept Creative accounting refers to instances when people responsible for preparation of financial statements usu... View the full answer