Which of the following is a form of earnings management in which revenues and expenses are shifted between periods to reduce fluctuations in earnings?
A) fraudulent financial reporting
B) expense smoothing
C) income smoothing
D) each of the above is correct

Question

Quizplus · Accepted Answer

Income smoothing is a type of earnings management in which a company shifts revenues and expenses between periods to achieve a more consistent pattern of earnings, reducing the volatility of reported income. This practice helps to maintain investor confidence and avoid negative reactions to large fluctuations in earnings. Choice A refers to intentionally misleading financial statements, and choice B is not a recognized term in accounting. Therefore, the correct answer is C.

Which of the Following Is a Form of Earnings Management