How Should We Think About Earnings Quality? A Discussion of 'Earnings Quality: Evidence from the Field'
23 Pages Posted: 19 Oct 2013
Date Written: October 17, 2013
Dichev, Graham, Harvey and Rajgopal (DGHR 2013) survey CFOs to elicit their views on earnings quality, broader trends in financial reporting, and the prevalence of earnings management. They provide some interesting insights on these issues. We discuss how CFOs’ incentives in the financial reporting process are likely to affect what we can learn from them about earnings quality. We also discuss how DGHR’s methodological choices regarding survey sample and question design affect their inferences, including what we can infer about the prevalence and magnitude of earnings management.
Keywords: Earnings quality, earnings management, survey methods, CFO
JEL Classification: M41
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