Generally accepted accounting principles leave ample room for managers to manipulate earnings to their satisfaction.

Question

Quizplus · Accepted Answer

While there are rules and guidelines in GAAP, there are still opportunities for managers to use accounting choices and estimates to influence reported earnings. This can be done within the bounds of GAAP and without breaking any laws, but it can still result in earnings that are not a true reflection of the company's financial performance.

Generally Accepted Accounting Principles Leave Ample Room for Managers to Manipulate