The misrepresentation of earnings

Published

Journal Article

© 2016 CFA Institute. All rights reserved. The authors conducted a survey of nearly 400 chief financial officers on the definition and drivers of earnings quality, with an emphasis on the prevalence and detection of earnings misrepresentation. The respondents believe that the hallmarks of earnings quality are sustainability, absence of one-Time items, and backing by actual cash flows. However, they also believe that in any given period, a remarkable 20% of companies intentionally distort earnings, even while adhering to GAAP. The magnitude of the misrepresentation is large: 10% of reported earnings.

Full Text

Duke Authors

Cited Authors

  • Dichev, I; Graham, J; Harvey, CR; Rajgopal, S

Published Date

  • January 1, 2016

Published In

Volume / Issue

  • 72 / 1

Start / End Page

  • 22 - 35

International Standard Serial Number (ISSN)

  • 0015-198X

Digital Object Identifier (DOI)

  • 10.2469/faj.v72.n1.4

Citation Source

  • Scopus