Studies seem to suggest that management tends to make accounting changes and/or manipulate discretionary accruals to

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Management tends to make accounting changes and manipulate discretionary accruals to avoid violation of debt covenants. By doing so, they can maintain access to credit and avoid penalties or default provisions in their loan agreements. Enhancing technical defaults or violating debt covenants would have the opposite effect, potentially leading to financial distress or even bankruptcy.

Studies Seem to Suggest That Management Tends to Make Accounting