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Please respond the following with informational informationWhen evaluating the quality of accounting information, the analyst looks at a variety of factors; accounting recognition, measures and classification as it fits economic activities, the reliability of the measurements, reasonableness of estimates and adequacy of disclosure and credibleness of the discussions (Whalen, Baginski, & Bradshaw, 2018). Earnings management can be a result of unrealistic estimates, bad judgements or unjustifiable choices producing low-quality balance sheets and/or income statement (Whalen, Baginski, & Bradshaw, 2018). An example of an unjustifiable choice would be for a manager to choose a LIFO inventory method to mislead stakeholders that the rising acquisition price of inventory yields out-of-date costs of the inventory on the balance sheet (Whalen, Baginski, & Bradshaw, 2018). By managing earnings downward this might create opportunity to report higher earnings in future periods (Whalen, Baginski, & Bradshaw, 2018). Reference Whalen, J., Baginski, S., & Bradshaw, M. (2018). Financial reporting, financial statement analysis and valuation(9th ed.) Mason, OH: Cengage Learning. ISBN-13: 9781337614689


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