Question: EXERCISE 61 Companies sometimes use earnings management techniques to increase reported earnings per share by as little as 1 cent. Required: Explain why a 1

EXERCISE 6–1 Companies sometimes use earnings management techniques to increase reported earnings per share by as little as 1 cent.

Required:

Explain why a 1 cent change in reported earnings per share would be insignificant for some companies but significant for other companies. Include in your answer references to at least two earnings targets toward which a company might be managing earnings per share.

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