a. Time, laws, regulation, and professional standards have restricted accounting practices to those.

a. Time, laws, regulation, and professional standards have restricted accounting practices to those that are moral, ethical, fair, and precise. Comment. b. Most managers surveyed had a conservative, strict interpretation of what is moral or ethical in financial reporting. Comment. c. The managers surveyed exhibited a surprising agreement as to what constitutes an ethical or unethical practice. Comment. d. List the five generalizations from the findings in this study relating to managing earnings. Occasionally, the morals and ethics executives use to manage their businesses are examined and discussed. Unfortunately, the morals that guide the timing of nonoperating events and choices of accounting policies largely have been ignored. The ethical framework used by managers in reporting short-term earnings probably has received less attention than its operating counterpart because accountants prepare financial disclosures consistent with laws and generally accepted accounting principles (GAAP). Those disclosures are reviewed by objective auditors. Managers determine the short-term reported earnings of their companies by: • Managing, providing leadership, and directing the use of resources in operations. • Selecting the timing of some nonoperating events, such as the sale of excess assets or the placement of gains or losses into a particular reporting period. • Choosing the accounting methods that are used to measure short-term earnings. Casual observers of the

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