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Earnings Quality reviews current research activities around earnings quality. It provides an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research with a focus on capital markets.
Earnings Quality examines how the precision of financial information affects the assessment and use of that information by capital market participants. The authors' main focus is on the precision of earnings, which is viewed as a summary indicator of the overall quality of financial reporting. The authors review:
· earnings quality and place earnings quality in the context of overall capital market information quality
· the determinants of earnings quality, broadly separated into intrinsic determinants that derive from business models and operating environments and reporting determinants that derive from the management's implementation decisions in financial reporting process
· twelve measures of earnings quality providing examples of research using these measures, and offer views on which measures are preferable in a given context.
· research design issues and research findings pertaining to the capital market consequences of earnings quality, in particular its association with expected returns (or the cost of capital) and unexpected (abnormal) returns
Earnings Quality should be of interest to many participants in the financial reporting process including standard setters, preparers, auditors, regulators, analysts, and financial press commentators. It should be of equal interest to accounting educators and researchers.
List of contents
1 Introduction. 2 Earnings quality as a component of information quality in the capital markets. 3 Determinants of Earnings Quality. 4 Measures of Earnings Quality. 5 Earnings Quality and Market Outcomes. 6 Concluding Remarks. References.
About the author
Jenni Francis was born in London, England and moved with her family to New Zealand when she was eight years old, for which she will be eternally grateful. Jenni has trained as a teacher, and a teacher of deaf children, as well as completing a degree in education. She began writing after her first grandchild was born, and has continued writing novels and short stories. Having had a wide range of different life experiences, including living and working on a dairy farm for two years, Jenni has much to draw on to fill out her novels. Skiing, beach holidays, school camps and school life are part of the background to her novels. She has been involved with children in her capacity as a teacher, a mother and a grandmother, and now as an author of children's books and has always enjoyed interactions with children. She intends to keep writing for children until she runs out of ideas, which won't be anytime soon! But, just for a change, Jenni has completed a novel that is aimed at adults. It is contemporary and is a departure from her adventure stories. The idea for another is tickling in her creative brain.Jenni lives on five acres with an orchard, a pond a stream and a neighbour's sheep. She has twelve grandchildren and she lives with her husband, a dog and a cat.
