Fundamentals of Earnings Management
Analyze how and why managers adjust reported earnings and how those decisions shape financial reporting outcomes. This course explains the incentives behind earnings management and examines the regulatory environment that constrains aggressive practices. Evaluate the roles of auditors, governance structures, and internal controls, and review the analytical techniques used to detect manipulation. Conclude with a focused discussion of ethical considerations and the professional judgment required in preparing financial statements.
Format
PDF Course
Course Lists
Duration
5 Hours
Course Information
Author: Steven Bragg
Course Number: AC1181
Table of Contents
Chapter 1. Introduction to Earnings Management
Chapter 2. The Regulatory Environment
Chapter 3. Financial Reporting Discretion
Chapter 4. Real Activities Manipulation
Chapter 5. Detection Models
Chapter 6. Audit, Governance, and Internal Control Issues
Chapter 7. Ethical Considerations
Chapter 5. Detection Models
Chapter 6. Audit, Governance, and Internal Control Issues
Chapter 7. Ethical Considerations
Learning Objectives
Describe the nature of earnings management.
Identify the accounting frameworks that define how earnings should be recognized, and how they differ.
Specify the control requirements and responsibilities imposed by the Sarbanes-Oxley Act.
Identify the government regulatory authorities that enforce compliance with accounting standards.
Recall how reserves can be used to manage earnings.
Specify the basis upon which reserve amounts are justified.
Describe the types of management actions that are considered to be real activities manipulation.
Specify the impact of changes in production levels on reported profits.
Specify the impact of changes in discretionary expenses on reported profits.
Recall how quantitative detection models function, and how they are used.
Recall the conditions that can cause a smooth, straight-line trend in reported earnings.
Specify the mindset that external auditors are expected to maintain during an audit.
Identify the audit areas that auditors focus on for possible earnings management.
Recall the components of the fraud triangle.
Recall the components of the COSO internal control framework.
Specify the types of ethical frameworks that an accountant may use.
Identify the likely outcomes if a company is caught using aggressive earnings manipulation.
Identify the accounting frameworks that define how earnings should be recognized, and how they differ.
Specify the control requirements and responsibilities imposed by the Sarbanes-Oxley Act.
Identify the government regulatory authorities that enforce compliance with accounting standards.
Recall how reserves can be used to manage earnings.
Specify the basis upon which reserve amounts are justified.
Describe the types of management actions that are considered to be real activities manipulation.
Specify the impact of changes in production levels on reported profits.
Specify the impact of changes in discretionary expenses on reported profits.
Recall how quantitative detection models function, and how they are used.
Recall the conditions that can cause a smooth, straight-line trend in reported earnings.
Specify the mindset that external auditors are expected to maintain during an audit.
Identify the audit areas that auditors focus on for possible earnings management.
Recall the components of the fraud triangle.
Recall the components of the COSO internal control framework.
Specify the types of ethical frameworks that an accountant may use.
Identify the likely outcomes if a company is caught using aggressive earnings manipulation.
Level: Overview
Instructional Method: QAS Self-Study
NASBA Category: Accounting
Prerequisites: None
Advance Preparation: None
Latest Review Date: January 2026
Program Registration Requirements: Click on the Enroll button to pay for and access the course. You will then be able to download the course as a PDF file, then take an on-line examination, and then download a certificate of completion if you pass the examination.
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