Incentives for earnings management are inherent in the management structure but are least likely to originate from:
A) high positive cash flows.
B) political considerations.
C) executive remunerations.
D) situations including financial distress.

Question

Quizplus · Accepted Answer

High positive cash flows generally reduce the need for earnings management, as the company is already performing well financially. In contrast, political considerations, executive remunerations, and financial distress situations can all create incentives for management to manipulate earnings to meet certain targets or appearances.

Incentives for Earnings Management Are Inherent in the Management Structure