This course provides an overview of earnings management techniques and their ethical implications. This course covers basics like revenue recognition timing, expense manipulation, provision adjustments, income smoothing, and cost-cutting. This course also addresses more advanced methods such as financial engineering, tax planning, big bath accounting, accounting policy changes, and round-trip transactions. Throughout this course, the ethical considerations inherent in these techniques are addressed through a series of example situations.
Publication Date: February 2026
Topics Covered
- Foundation of Earnings Management Techniques
- Revenue Recognition Timing
- Expense Manipulation
- Provision Manipulation
- Reserve Manipulation
- Asset Valuation Adjustments
- Income Smoothing
- Cost-Cutting Timing
- Advanced Earnings Management Strategies
- Financial Engineering
- Tax Planning
- Big Bath Accounting
- Accounting Policy Changes
- Round-Trip Transactions
Learning Objectives
- Identify different methods of revenue recognition timing used in earnings management
- Recognize examples of expense manipulation in financial reporting
- Distinguish between provision and reserve manipulation techniques
- Determine the impact of asset valuation adjustments on reported financial performance
- Differentiate between income smoothing strategies and their effects on financial statements
- Identify financial engineering techniques in advanced earnings management
- Distinguish legitimate tax planning from earnings management strategies
- Determine the impact of big bath accounting on financial reporting
- Differentiate permissible changes in accounting policies from manipulative adjustments
- Recognize risks associated with round-trip transactions in earnings management
Level
Overview
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Kelen Camehl
Kelen is a recognized author and reviewer of CPE courses and has authored over 145 courses (350 CPE credit hours) covering a range of accounting, auditing, financial reporting, regulatory, and ethics topics. His courses are available for purchase from many online CPE providers including the AICPA. Kelen remained involved in CPA exam content development for nearly 10 years and authored more than a thousand multiple choice questions for various sections of the CPA exam. He also serves as an Editorial Advisor for the AICPA’s "Journal of Accountancy".
Kelen has nearly 20 years of progressive finance and accounting experience. He currently serves as an Accounting Policy Advisor with HP. Prior to HP, he served in multiple accounting roles in the oil & gas industry with ConocoPhillips including technical accounting policy, SOX compliance, and internal audit. He also gained public accounting experience with PricewaterhouseCoopers, working with various clients in the energy, electric, power, gas, and utility sectors.