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Conservatism and make accounting numbers

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Reference no: EM1354377 , Length: 350 words

The conservatism principle arises because of concerns about management's incentives to overstate the firm's performance. Consider the statement: "We could get rid of conservatism and make accounting numbers more useful if we delegated financial reporting to independent auditors, rather than to corporate managers." Do you agree? Why or why not?

Reference no: EM1354377

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