👉 Earnings engineering refers to the practice of manipulating a company's financial metrics, particularly earnings per share (EPS), to present a more favorable financial picture to investors and analysts. This is often achieved through various accounting techniques and strategic decisions, such as adjusting revenue recognition timing, deferring expenses, or using complex financial instruments to smooth out earnings volatility. While these methods can temporarily boost reported earnings, they may not reflect the company's true underlying financial health or sustainability. Earnings engineers aim to create a misleadingly positive narrative, potentially influencing stock prices and investor perceptions, but such practices can lead to regulatory scrutiny and damage to a company's reputation if discovered.
