(i) Describe what is meant by the term ‘earnings management’.
(ii) Provide an example of earnings management that relates to accrual accounting.
(iii) In terms of depreciation of the non-current asset your business purchased in stage 1 of the business design project:
a. Provide an estimate of the useful life of the asset justifying your estimate;
b. Provide an estimate (and justification) of the residual (scrap) value of the non-current asset;
c. Describe the link between depreciation of non-current assets and earnings management.