THE ANALYSIS OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) ALLOWS AN ACCOUNTANT TO CHOOSE FROM A VARIETY OF METHODOLOGIES

ABSTRACT

To examine the strategies of earnings management in Indian corporate organizations in order to emphasize on the importance of high-quality earnings for maximizing shareholder wealth. In terms of stock pricing volatility and persistence, this paper compares and contrasts the accrual and cash-flow accounting systems. It is suggested that the accrual method is the fundamental cause of the tendency to manage earnings. There is evidence that the accrual method of accounting is preferred by the stock market. Examines the quantity of discretionary accruals in the units for probable earnings management, as well as the issue of the reliability of the company’s earnings reporting. Explores whether proxies for IOS can be used to explain income smoothing and delves more into the well-studied topic of growth opportunities and corporate profits management approaches.

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