This considerable subjectivity in the determination of the VA suggests that it may be an attractive account for managing earnings.30 Since changes in the VA account typically flow through the income tax expense, manipulation of the VA account could be an effective means of earnings management. However, to the extent managers wish to camouflage their earnings management, other accounts may dominate the VA because firms must report the amount of the VA in the footnotes to their financial statements. In other words, the visibility of the VA may diminish its usefulness in earnings management. Research in this area examines a variety of possible earning management objectives including reporting smooth earnings, taking big baths, creating ‘‘cookie jar’’ reserves, and meeting various earnings targets. These studies provide little evidence that the valuation allowance is used to manage earnings with one exception: firms appear to use the VA to meet or beat analysts’ forecasts.