Additional flashcards
1
Q
The management obfuscation hypothesis
A
Predicts that self-interested managers opportunistically choose information
2
Q
Pay-performance sensitivity
A
The strength of incentives
3
Q
Earnings management can be
A
Real
Accruals-based
4
Q
What does it mean that accruals reverse?
A
Accountants cannot “create” or “destroy” revenues and expenses, they can only move them between periods. Which means understating expenses in this period will result in an overstatement in a future period.
