PRACTICAL AND DECISION ANALYSIS Elizabeth is the CEO of Dynamite International Limited. She is entitled...
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PRACTICAL AND DECISION ANALYSIS Elizabeth is the CEO of Dynamite International Limited. She is entitled to receive a fixed bonus of $100,000 if the business achieves or exceeds the annual profit target. If she does not achieve the target, she will not receive any bonus. Below is a snapshot of her analysis: Target Profit: 2016 to 2019 is $2,000,000. Calculated Profit: 2016 - $2,200,000; 2017 - $1,990,000; 2018 - $1,750,000; 2019 - $2,300,000 REQUIRED: 1. Discuss the type of behaviour that will be engaged by Elizabeth in each year (2016 - 2019) from the above scenario. (10 Marks) Hint: use appropriate terminologies in earnings management/accounting manipulations, 2. Explain how heuristics can be applied in financial reporting from users' perspective with examples. (5 Marks) 3. Explain 2 ways of presenting financial statements with its benefits and limitations
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