Who's Got Their Hand in the Cookie Jar

Earnings Management (EM) is a phrase often given to the accounting decisions (or practices) managers make that can affect the outcome of the “Bottom Line.” Current definitions lend a negative connotation to the phrase and thus people think that all earnings management is wrong, but this book maintains that not all decisions are “bad.” There are viable decisions managers can make that still help maintain a solid bottom line and are still ethical, mainly because the intent behind the decision is not to deceive. Thus, intent is key. When the intent is to deceive, the resulting actions are defined as fraud, which is illegal. Therefore, many definitions must better distinguish differences between earnings management practices and fraudulent practices. Furthermore, this book attempts to answer the following ethics question: Can one perform EM ethically and still maintain profitable bottom lines? This discussion prompts further questions such as: Is something ethical if it is legal or is something unethical if it is illegal?