The existingresearches on earningsmanagementare mostlybased on annualaccountingearnings; topic onearnings management in interimaccounting report is seldom deeply studied.
Despite the implementation of mark-to-market accounting rules, LPs are understandably skeptical of interim valuations, which they believe leave GPs a fair amount of room for subjective judgment.
In the interim, earnings had faltered, the Securities and Exchange Commission launched an accounting probe and the company made several changes in top management.