Earnings Management

Earnings management refers to the strategies companies use to influence their financial reports, presenting a more favorable view of their performance than might be accurate. This can involve timing revenue and expenses or using accounting practices to smooth out profits over time. While some practices are legal and accepted, others can mislead investors and stakeholders about a company's true financial health. The goal is often to meet financial targets or expectations, but it can raise ethical concerns if it obscures the real financial situation of the company.