Research On Earnings Quality

For the extent of financial reports tending to be inconsistent with the facts is getting worse, people pay more and more attention to the qualification of reported earnings. Research on earnings quality is developing like a raging fire in both accounting profession circle and academe; however here is the pity that no uniform cognition on the concept of earnings quality came into being and no widely recognized measurement and comprehensive assessing system formed, for the existing difficulties.The dissertation starts with the concept of earnings, then analyses the developing history of economic earnings and accounting earnings and their characteristics, and the characteristics of new coming earnings concepts—comprehensive incoming and EVA, and the investors'expectation of earnings'properties, bringing forward the two level connotation of earnings quality, which is security, persistency and accrescence of economic earnings and the extent of accounting earnings representing true earnings. After confirming the connotation of the earnings quality, the dissertation concludes the nine characteristics which high quality earnings should have. They are security, stability, persistency, accrescence, representational faithfulness, integrity, adequately and duly disclosing, conservatism, extent of cash covering accounting earnings. These characteristics can be regard as the basic criterion of earning quality assessing.From the angles of four levels of society, industry, enterprise, and specific accounting application, the second part of the dissertation, analyses the elements influencing earnings quality existing in the environment where economic earnings coming into being and the course of yielding accounting information, pointing how the elements influence earnings quality and how to assess earnings quality by analyzing these elements.In the part of constructing earnings quality assessing system, the dissertation discussed the necessary components of the system, emphasizing that basic analysis should be combined with quantitative measuring methods, and give some tips on earnings quality assessing for users'reference.