Understanding earnings quality: A review of the proxies, their determinants and their consequences

• 成果类型: Article
• 署名作者: Dechow, Patricia; Ge, Weili; Schrand, Catherine
• 署名单位: University of Pennsylvania; University of California System; University of California Berkeley; University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2010.09.001
• 发表日期: 2010
• 关键词: time-series properties; internal control deficiencies; inventory accounting methods; loan loss provisions; deferred tax assets; nonaudit services; VALUE-RELEVANCE; corporate governance; Cash flows; voluntary disclosure

摘要

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. (C) 2010 Elsevier B.V. All rights reserved.