managers would rather take economic actions that could have long-term consequences than make within- GAAP accounting choices to manage earnings

managers work to maintain smoothness and predictability in earnings and financial disclosures

managers make voluntary disclosures to reduce information risk and boost stock price but at the same time trying to avoid setting disclosure precedents that will be difficult to maintain

the two most important earning benchmarks are quarterly earnings last year (same quarter) and analysts consensus estimate

they believe that meeting or exceeding benchmarks is very important

managers describes a trade-off between short term need to deliver earnings and long-term objective of making value-maximizing investment decisions

executives believes that hitting earning benchmarks builds credibility with the market and helps to maintain or increase stock prize

large reaction on the stock market to small earning benchmark misses can be explained as evidence that the markets expects earning management and if a company is unable to find the needed money to hit benchmark the problem might be worse than the small gap would entail