A version of earnings management that became common in the 1990s was
A) when management made changes in the operations of the firm to ensure that earnings did not increase or decrease too rapidly.
B) reported "pro forma earnings."
C) when management made changes in the operations of the firm to ensure that earnings did not increase too rapidly.
D) when management made changes in the operations of the firm to ensure that earnings did not decrease too rapidly.

Question

Quizplus · Accepted Answer

Reported "pro forma earnings" became a common version of earnings management in the 1990s. This practice involves presenting earnings figures that exclude certain expenses or non-recurring items, often to present a more favorable financial performance.

A Version of Earnings Management That Became Common in the 1990s