The Selection Of Earnings Quality Evaluation Method

In recent years, accounting fraud happened more frequently, and then the authenticity of the earnings has been questioned, so the earnings quality has become the focus of discussion.In this situation, the thesis use combination of specification and empirical research methods, analysis the earnings quality of evaluation in different industries. Through analysis the earnings quality content, evaluation methods and other related, draws the following 2 conclusions:(1) Different industries own different operating characteristics, the differences also exist in the earnings profit characteristics. Therefore, the listed companies in different sectors should use different methods when evaluate the earnings profits. (2) Financial and insurance industry should pay more attention to earning's cash reliability, but for non-finance and insurance industry like manufacturing industry should pay more attention to persistence.Based on the above theoretical results, writer use a sample of 1576 listed companies date that in 2007 to 2009's annual report. Use the variance coefficient of ratio of net earning to net asset to reflect the earning quality, the operating profit/total profit to reflect the earning persistence, the net operating cash flow/operation profit to reflect the earning's cash reliability, by descriptive statistics and regression analysis, verified the conclusion of the specification, and the results confirmed my assumptions. At the same time, the study results proved the theoretical and practical significance of using different methods to evaluate the earnings quality of different industries.