As earnings season begins again, I thought it would be worth looking at an excerpt from an speech at NYU by then-SEC Chairman Arthur Levitt called The Numbers Game:
Well, today, I’d like to talk to you about another widespread, but too little-challenged custom: earnings management. This process has evolved over the years into what can best be characterized as a game among market participants. A game that, if not addressed soon, will have adverse consequences for America’s financial reporting system. . . .
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