Under the cookie jar system, management will build up financial reserves in profitable years and release the financial reserves into the financial statements during unprofitable years.

Question

Quizplus · Accepted Answer

Under the cookie jar system, management intentionally saves profits during profitable years and releases them later in unprofitable years to create a cushion for the company's performance. This practice is considered unethical and can mislead stakeholders about the company's true financial performance.

Under the Cookie Jar System, Management Will Build Up Financial