Accounting › Section H · Accounting for receivables › Topic H.4
Receivables and earnings management
Receivables rest on estimates and timing, and both can be nudged. This topic shows where honest judgement ends and earnings management begins, how receivables are used to shape profit, and the warning signs an analyst can read in the ratios.
In this topic
- Judgement creates room to manoeuvre
- Management, manipulation and fraud
- Why managers do it
- Lever 1: the bad debt estimate
- Worked example: trimming the allowance
- Lever 2: pulling sales forward
- Worked example: reading the warning signs
- Who is watching
- Common mistakes to avoid
- Key takeaways
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