Financial Information and Earnings Quality: A Literature Review

2006 ◽  
Author(s):  
Séverine Hermanns
Keyword(s):  
Literature Review ◽  
Earnings Quality ◽  
Financial Information

scholarly journals Do audit committee characteristics of Bahraini listed companies have an effect on the level of internet financial reporting?

2016 ◽  
Vol 13 (3) ◽  
pp. 131-147 ◽  
Author(s):  
Sara AbdulHakeem Saleh AlMatrooshi ◽  
Abdalmuttaleb M. A. Musleh Al-Sartawi ◽  
Zakeya Sanad
Keyword(s):  
Corporate Governance ◽  
Literature Review ◽  
Financial Reporting ◽  
Audit Committee ◽  
Positive Relationship ◽  
Listed Companies ◽  
Financial Information ◽  
The Internet ◽  
Regression Test ◽  
The Relationship

Corporate Governance and IFR are influential topics that need to be addressed nowadays due to its importance. Especially since companies are growing and extending globally. This research is conducted in Kingdom of Bahrain through the year 2014, where it investigates the relationship between Audit Committee characteristics as a tool of CG and IFR. Literature review has been conducted, not to mention Multi-regression test was used to evaluate the relationship between Audit Committee characteristics and IFR for Bahraini listed companies. The results have showed that the relationship between Audit Committee characteristics and IFR is negative, which indicates that the Audit committee characteristics have no influence over the disclosure of financial information over the internet. However, Frequency of meeting of the board and Big4 resulted in a positive relationship with internet financial reporting. The study ends with a main conclusion and recommendation that contain certain steps and advices of disclosing financial information in an appropriate way through the internet in order to improve the relationship between Audit committee characteristics and IFR.

scholarly journals Standard Jones and Modified Jones: An Earnings Management Tutorial

2022 ◽  
Vol 26 (2) ◽  
Author(s):  
Cristiano Machado Costa ◽  
José Mauro Madeiros Velôso Soares
Keyword(s):  
Literature Review ◽  
Earnings Management ◽  
Earnings Quality ◽  
Cash Flows ◽  
Measurement Methods ◽  
Return On Assets ◽  
Future Studies ◽  
Key Concepts ◽  
Jones Model

ABSTRACT Context: measurement of earnings management usually requires multi-step models for computation. After examining the literature through bibliometrics studies, literature review, and research databases, we found that the Standard Jones model and its subsequent modifications are those that have more prominent use. Much of this research is potentially interesting for business theories related to earnings quality and accounting manipulation; however, it is difficult to be understood by junior researchers and practitioners, because they are not clearly described in the literature or the steps may be easy to confuse. Objective: in this tutorial, we present several key concepts about earnings management and explain, step by step, how to measure it. Method: our tutorial considers measurement using the following models: Standard Jones, Modified Jones, Modified Jones with return on assets (ROA), and Modified Jones using Cash Flows and Accruals Reversals. Conclusions: our main contribution with this tutorial is to provide a step-by-step guide for future studies, so that they can be more comparable with each other when using measurement methods of earnings management.

scholarly journals Do fair value measurements affect accounting-based earnings quality? A literature review with a focus on corporate governance as moderator

2021 ◽  
Author(s):  
Johannes Thesing ◽  
Patrick Velte
Keyword(s):  
Corporate Governance ◽  
Literature Review ◽  
Value Relevance ◽  
Earnings Quality ◽  
Predictive Ability ◽  
Quality Measures ◽  
Fair Value ◽  
Future Research ◽  
Earnings Persistence ◽  
Fair Value Measurements

AbstractThis structured literature review of 48 archival-based studies investigates the influence of fair value measurements on earnings quality and stresses the moderating impact of corporate governance. We focus on accounting-based earnings quality measures that have several advantages for investigating agency-related earnings management behavior compared to market-based measures (e.g. value relevance studies). Fair value measurements are not restricted to specific industries, periods, circumstances, or items in our sample. Based on the applied earnings quality measure, the reviewed articles are structured into five categories: (1) earnings persistence and predictive ability, (2) discretionary accruals, (3) target beating and properties of analysts’ forecasts, (4) earnings variability, and (5) other earnings quality measures. We indicate three key findings: first, fair value measurements show mixed earnings quality; second, lower-level fair value measurements decrease earnings quality; and third, corporate governance measures enhance earnings quality. After that, we deduce six research questions for future research. We show possible extensions to previous research designs in methodology and settings. Future research should also focus on corporate governance variables to a greater extent, especially compensation and board structures. Thereby, we suggest extending the neoclassical view with behavioral aspects.

scholarly journals The impact of auditor rotation, audit firm rotation and non-audit services on earnings quality, audit quality and investor perceptions: a literature review

2018 ◽  
Vol 7 (2) ◽  
pp. 74-90 ◽  
Author(s):  
Patrick Velte ◽  
Thomas Loy
Keyword(s):  
Literature Review ◽  
Empirical Research ◽  
Audit Quality ◽  
Earnings Quality ◽  
The European Union ◽  
Quality Audit ◽  
Audit Firm ◽  
Research Activities ◽  
The Impact ◽  
Non Audit Services

This literature review evaluates 103 empirical research studies on the link between rotation and non-audit services on the one hand and their influence on earnings quality, audit quality and investor perceptions on the other hand. After the financial crisis 2008/09, regulators all over the world are aware of decreased stakeholder trust in earnings and audit quality. As a reaction, stricter rules on rotation and non-audit services by public interest entities (PIEs) have been implemented (e.g. in the European Union). However, the impact of these regulations on earnings and audit quality is still controversial. We briefly introduce the theoretical, normative and empirical audit framework that comprises an adequate structure of the state-of-the-art of empirical research in this field. We summarize the findings in each research area, while we split our rotation analysis in an audit firm and audit partner rotation and tenure and our dependent variables in earnings quality, audit quality and investor perception measures. Most of the cited studies are linked to earnings-related measures, especially abnormal accruals models. The mixed results can be explained by the different theoretical impacts of agency- and resource-based view. Finally, we will discuss the current limitations of the studies and give useful recommendations for future empirical research activities on this topic.

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