Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?
A)Taking a bath
B)Creative acquisition accounting
C)Creasing "cookie jar" reserves
D)Abusing the materiality concept

Question

Quizplus · Accepted Answer

Abusing the materiality concept involves deliberately ignoring or recording errors that are deemed insignificant. This can be a form of earnings management as it allows companies to manipulate their financial statements by hiding small discrepancies or errors.

Deliberately Recording Errors or Ignoring Mistakes in the Financial Statements