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Earnings Quality

Definitions, Measures, and Financial Reporting

Authors: Menicucci, Elisa

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  • Provides an overview of earnings quality (EQ) in the context of financial reporting
  • Offers suggestions for defining and measuring earnings quality (EQ)
  • Describes the relationship between EQ and earnings management (EM)
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eBook $44.99
price for USA
  • ISBN 978-3-030-36798-5
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Hardcover $59.99
price for USA
Softcover $59.99
price for USA
About this book

This book provides an overview of earnings quality (EQ) in the context of financial reporting and offers suggestions for defining and measuring it. Although EQ has received increasing attention from investors, creditors, regulators, and researchers in different areas, there are various definitions of it and different approaches for its measurement.

 The book describes the relationship between EQ and earnings management (EM) since they can be considered related challenges, especially in the context of international financial reporting standards (IAS/IFRSs). EM occurs when managers make discretionary accounting choices that are regarded as either an efficient communication of private information to improve the informativeness of a firm’s current and future performance, or a distorting disclosure to mislead the firm’s true performance. The intentional manipulation of earnings by managers, within the limits allowed by the accounting standards, may alter the usefulness of financial reporting and lead to lower quality of earnings. The use of fair value in financial reporting has created a current debate about the impact it might have on EQ. At times, the high subjectivity in estimating fair value can allow opportunities for the exercise of management judgments and intentional bias, which can reduce the quality of financial reporting. Management discretion can result in high EM and hence in a reduction of EQ. Particularly during difficult financial periods, managers engage in EM to mask the negative effects of the turmoil, and in such circumstances accruals and earnings smoothing are attempts to reduce abnormal variations of earnings in such circumstances. This book is a valuable resource for those interested in wider perspectives on EQ and it adds to the research studies on this topic in the context of financial reporting.


About the authors

Elisa Menicucci is an Assistant Professor of Business Administration at the Department of Business Studies, University of Roma Tre, Rome, Italy. Her research focuses on accounting, business valuation, and integrated reporting, and she is also involved in editorial and review activities for various international journals. Elisa is a chartered accountant and auditor, and also provides consultancy services, mainly in the areas of accounting, auditing, and business valuation for financial institutions and companies.

Table of contents (5 chapters)

Table of contents (5 chapters)

Buy this book

eBook $44.99
price for USA
  • ISBN 978-3-030-36798-5
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Hardcover $59.99
price for USA
Softcover $59.99
price for USA

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Bibliographic Information

Bibliographic Information
Book Title
Earnings Quality
Book Subtitle
Definitions, Measures, and Financial Reporting
Authors
Copyright
2020
Publisher
Palgrave Pivot
Copyright Holder
The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG
eBook ISBN
978-3-030-36798-5
DOI
10.1007/978-3-030-36798-5
Hardcover ISBN
978-3-030-36797-8
Softcover ISBN
978-3-030-36800-5
Edition Number
1
Number of Pages
XI, 147
Number of Illustrations
1 b/w illustrations, 1 illustrations in colour
Topics