Which of the following situations might influence management to intentionally bias estimates for the financial statements and impede the use of good judgment?
A) Earnings are on track to surpass analysts' forecasts.
B) Management's bonuses are tied to net income.
C) Employees work for commission.
D) All of the above

Question

Quizplus · Accepted Answer

Management's bonuses being tied to net income creates an incentive to manipulate financial estimates to increase reported income and achieve higher bonuses.

Which of the Following Situations Might Influence Management to Intentionally