Lev, Beaver, Revsine and Watts each discuss the nature of the capital market and stakeholders relevant to the firm in conjunction with different approaches to financial reporting disclosures.   Based on their discussion, the knowledge that earnings management occurs (Dechow and Skinner, 2000 and Nelson et al, 2003) and other readings you have done, what are the benefits and drawbacks to have more or less rigid financial reporting rules? In which direction should standard setters move (more or less rigid) over the next several years?

Answer rating: 100% (QA)

Solution Q1 ANS It should be no surprise that accounting standards have become more complex over the years Transactions have become increasingly challenging as new products and services emerge and fin... View the full answer