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Companies often are under pressure to meet or beat Wall Street earnings projections in order to increase stock prices and als

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Answer #1

The answer in one word is NO.

Let me explain this in detail for you. Income or net earnings can be higher in one quarter /half year and lower in other. Earnings management will shift income to high or low to achieve goal of organisation. If in particular quarter /half year the earnings are more than texpected in budgeted ,this lead to increase in reserves to eliminate excess earnings and hold to another quarter /half year in which becomes short . In some cases of fraud managers are reported less / more earnings which leads to manupulation of income. However in major cases they try to avoid decreases. Income shifting can be done by acceleration or deferred recognition of revenues. Therefore it is not always necessary to produce higher income for earnings management.

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