This article discusses earnings management in the post-SOX period. Please answer the following questions in about 3-4 pages double spaced in total.
1. Explain the purpose of the article, the method used by the author to conduct the study and the overall conclusions reached.
2. On page 61 toward the bottom in the paragraph that starts with “as such, GAAP could no longer be regarded…..” Do you agree with this position? Why or why not? Do you think this is fair to managers who simply want to follow GAAP? Why or why not?
3. Do you personally think conservatism has increased since SOX? Why or why not?
4. The author states “auditors will not use the audit opinion to police bad business practices, even if they involve earnings management”. How do you explain that? Do you agree with the auditors’ position? Why or why not?