Financial Analysis And International Accounting

Write an essay of between 980 and 1020 words on the following topic:

In the context of earnings management and income smoothing, critically assess how and why ratios are used in analysing the financial statements of a company and what actions should any assessment of possible earnings management or income smoothing also include.

Please notes

· You must define all terms used including, for example, ‘earnings management’ and ‘income smoothing’.

· Your answer must be illustrated with appropriate examples from an actual case of a company where earnings management or income smoothing was found to have occurred.