Explain what the authors meant by given statement

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Reference no: EM131380217

1. Comment on the statement that what a company's income statement reveals is interesting, but what it conceals is vital.

2. Maines and Wahlen58 state in their research paper on the reliability of accounting information: "Accrual estimates require judgment and discretion, which some firms under certain incentive conditions will exploit to report non-neutral accruals estimates within GAAP.

Accounting standards can enhance the information in accrual estimates by linking them to the underlying economic constructs they portray." Explain what the authors meant by this statement with respect to the possible existence of earnings management.

Reference no: EM131380217

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