What is meant by earnings quality? Why do users assess earnings quality? What major factors determine earnings quality?
Answer to relevant QuestionsWhat are discretionary expenses? What is the importance of discretionary expenses for analysis of earnings quality?Identify and explain three types of earnings management that can reduce earnings quality.Distinguish between short-term and long-term accruals.Explain what is meant by the term earnings management and what incentives managers have to engage in earnings management.a. Identify at least two reasons why an accrual accounting income statement is more useful for analyzing business performance than a cash flow based income statement.b. Describe what would be reported on the asset side of a ...
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