경영정상화를 위한 의사결정과 이익조정: (주)혁신엔지니어링의 사례

초록

This case describes managers’ decisions on accrual based earnings management and real earnings management to increase reported earnings. To overcome the financial distress of Innovation Engineering Co. (IE), managers of IE set up a recovery plan, including the reduction of several discretionary expenses, such as selling and general administrative expense and research and development expense. IE also sold several real estates (land) that are currently not in use for operation. In addition to the changes in real business operations, managers of IE made several accrual-based decisions that are not related to the change of real business operations. The decisions include changes in accounting policies related to capitalization of research and development expenditure and the estimation of bad debts and depreciation. With the case of IE, one can understand how managers use opportunistic earnings management tools to increase short-term reported earnings.

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