Describe what you believe would be the likely behavior of managers under each of the three situations described above. This is a discussion question that I need help with. It has to be in 300-350 words and include references. Please help! A significant part of the compensation received by the leaders of large business entities comes from company-sponsored bonus plans. Determination of the amount of compensation to be awarded under many of these bonus plans is based on net income or some variant of net income. Bonus plans typically provide for a target earnings number that must be achieved in order for bonuses to be paid. This target amount of earnings usually is a percentage either of shareholdersâ€™ equity or total assets. If earnings fall below the target, then no bonuses are awarded. A bonus plan may also provide for a maximum amount of earnings above which no bonus will be paid. Accounting research suggests that managers of firms with bonus plans are more likely to choose accounting procedures that shift reported earnings from future periods to the current period. In light of this finding, consider how managers might behave given the following situations: 1. Earnings are far below the target level for the bonus. 2. Earnings are just slightly below the target level for the bonus. 3. Earnings are above the upper limit provided by the bonus plan; no bonus would be paid beyond this upper limit.
AcademicPaperExperts.com is a platform where students from all over the globe can get assignment assistance. It is our endeavor to provide customized assignments which are authentic for students in the United States, United Kingdom, New Zealand, Australia and other countries around the globe. Our team undergoes thorough training to handle all the inquiries in a professional manner. We do not set the bar in custom essay writing, we are the bar. All the custom papers and essays you order are written by our writers in tandem with your requirements.
Welcome to WordPress. This is your first post. Edit…