Earnings Quality examines how the precision of financial information affects the assessment and use of that information by capital market participants. The authors' main focus is on the precision of earnings, which is viewed as a summary indicator of the overall quality of financial reporting. The authors review:

• earnings quality and place earnings quality in the context of overall capital market information quality
• the determinants of earnings quality, broadly separated into intrinsic determinants that derive from business models and operating environments and reporting determinants that derive from the management's implementation decisions in financial reporting process
• twelve measures of earnings quality providing examples of research using these measures, and offer views on which measures are preferable in a given context
• research design issues and research findings pertaining to the capital market consequences of earnings quality, in particular its association with expected returns (or the cost of capital) and unexpected (abnormal) returns

Earnings Quality should be of interest to many participants in the financial reporting process including standard setters, preparers, auditors, regulators, analysts, and financial press commentators. It should be of equal interest to accounting educators and researchers.

Published by Now Publishers and marketed by World Scientific

Contents:

• Introduction
• Earnings Quality as a Component of Information Quality in the Capital Markets
• Determinants of Earnings Quality
• Measures of Earnings Quality
• Earnings Quality and Market Outcomes
• Concluding Remarks
• References