1. Earnings management
Thousands of analysts spend hours everyday crunching numbers to project the returns companies will make in the future and the corresponding value of their stock prices. As executive compensation becomes more closely tied to the performance of a company's stock, executives pay much more attention to analysts" forecasts. ... Are sophisticated users of financial data (such as analysts and institutional investors) able to see through the accounting hocus pocus to perceive the true value of companies, or are investors unable to tell the quality of reported earnings? ...
- Word Count: 568
- Approx Pages: 2
- Has Bibliography
- Grade Level: Undergraduate