1. Control Various accruals (Short run earnings mgmt technique)
(AFDA, Allowance for obsolesce, amortization, accrued liability portion)
(Govt grants receivable, deferred income taxes, dividends)
manager who manages earnings upwards to a level greater than he/she can sustain will find that the reversal of these accruals in subsequent periods will force future earnings downwards.
2. Change accounting policies (longer run earnings mgmt)
(LIFO to FIFO)