The one-time overstatement of restructuring charges to reduce assets,which reduces future expenses,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

Taking a bath is the deliberate overstatement of expenses or understatement of revenues in order to decrease reported earnings, with the intention of improving future financial results. The overstatement of restructuring charges is an example of taking a bath.

The One-Time Overstatement of Restructuring Charges to Reduce Assets,which Reduces