Research indicates that few managers would engage in real transaction management (e.g.,delaying research and development or advertising)in order to meet earnings targets.

Question

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Research has shown that some managers do engage in real transaction management, such as delaying research and development or advertising expenses, to meet earnings targets. This practice is part of earnings management strategies to manipulate financial reports in the short term, often at the expense of long-term company health.

Research Indicates That Few Managers Would Engage in Real Transaction