Accounting Papers

Document Type

Journal Article

Date of this Version

12-2010

Publication Source

Journal of Accounting and Economics

Volume

50

Issue

2-3

Start Page

344

Last Page

401

DOI

10.1016/j.jacceco.2010.09.001

Abstract

Researchers have used various measures as indications of “earnings quality” including persistence, accruals, smoothness, timeliness, loss avoidance, investor responsiveness, and external indicators such as restatements and SEC enforcement releases. For each measure, we discuss causes of variation in the measure as well as consequences. We reach no single conclusion on what earnings quality is because “quality” is contingent on the decision context. We also point out that the “quality” of earnings is a function of the firm’s fundamental performance. The contribution of a firm’s fundamental performance to its earnings quality is suggested as one area for future work.

Copyright/Permission Statement

© 2010. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

earnings quality, earnings management, review, survey

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Date Posted: 27 November 2017

This document has been peer reviewed.