They wonder whether decisions, like when to sell a company that has been taken private, will be made to manage earnings rather than maximize them over time.

"The number, nature and timing of the accounting errors strongly suggest that they resulted from an intent to manage earnings," the report said.

He hastened to add, "We do not try to manage earnings but try to manage the book of business."

Then, Mr. Scott says, the benefactors need to decide how to manage the fund's endowment and subsequent earnings.

They also managed earnings to appeal to Wall Street's short-term orientation.

One commissioner, Norman S. Johnson, said in a speech earlier this year that "managed earnings" are a top enforcement priority.

"Andersen auditors would never, under any circumstances, tolerate an arrangement intended to manage earnings," he said.

That, he said, "would help abolish perverse incentives to manage earnings, distort accounting or emphasize short-term stock performance."

"It becomes very hard to manage earnings."

Evidence of how well companies have managed earnings can be seen in the number of reports that beat Wall Street estimates by a single penny a share.