Accounting practices are likely to influence manager behaviour:
A) When bonuses are based on employee turnover
B) Only in manufacturing organizations
C) Only in for-profit organizations
D) When managers are compensated based on accounting earnings

Question

Quizplus · Accepted Answer

When managers are compensated based on accounting earnings, they are likely to be influenced by accounting practices as they directly impact their compensation. If accounting practices result in higher earnings, then the manager's compensation will be higher, which may lead them to make decisions that prioritize short-term financial gain over the long-term goals of the organization.

Accounting Practices Are Likely to Influence Manager Behaviour