is research on earnings management and earnings quality belong to same are?
what is the difference in the main thrust of of research on Earnings management and Earnings quality?
thanks in advance
I think Earnings quality is a broader topic than Earnings management.
You can have a look at the work of Dechow, Ge & Schrand (2010) entitled "Understand earnings quality: A review of proxies, their determinants and their consequences", and you might get the brief idea about the differences between those 2 topics.
In short, higher earnings quality means the firm provides more information about its financial performance that can support the decision-making process of investors. management and other information users.
On the other hand, earnings management also, to a certain extent, reflect earnings quality. However, it is not really about decision-making from the managerial perspective.
There is a close and negative relationship between "Earnings quality" and "Earnings management". It means that Earnings management is assumed to erode Earnings quality which is a broader and more complex concept that can be measured by several proxies. You will find, herewith, an article by Dechow et al. (2010) "Understanding earnings quality: A review of proxies, their determinants, and their consequences", Journal of Accounting and Economics, 50: 344-401, which could be useful.
I think the following paper would be helpful:
Earnings management and earnings quality
K Lo - Journal of Accounting and Economics, 2008 - Elsevier
The two concepts are inversely related. Earnings quality is the ability of earnings to reflect the economic reality. While Earnings management occurs when the earnings does not reflect the economic reality. Earnings management is one of the components of measuring the quality of earnings. Thus, Earnings quality is a broader concept compare to Earnings management.
Earnings management is a broader concept. It includes Earnings quality and financial risks.
Dear Srikanth
Earnings management is a subset of earning quality. Earnings management arises from manipulation of earnings of management (to increase or decrease profit, or diminish or magnify a loss, or reduce the variance of earnings) whereas earnings quality considers both earnings manipulation as well as other factors such as auditor reputation, accounting practices adoption, et cetera. Some earnings quality literature cites are:
Article Earnings Quality in UK Private Firms: Comparative Loss Recog...
https://www.aaajournals.org/doi/abs/10.2308/aud.2003.22.2.71
Article Founding Family Ownership and Earnings Quality
Article Discussion of the Quality of Accruals and Earnings: The Role...
https://www.nber.org/papers/w8308
Article Voluntary Disclosure, Earnings Quality, and Cost of Capital
Article Exploring the Term of the Auditor-Client Relationship and th...
Article Earnings Quality: Evidence from the Field
Article Female Directors and Earnings Quality*
Article Is Earnings Quality Associated with Corporate Social Responsibility?
Though researchers equate earnings management with earnings quality, I suggest earnings quality should be equated with compliance with IASB's qualitative characteristics of financial statements. Earnings management arises from the manipulation of earnings to achieve managers' subjective goals. Earnings management is an unethical behaviour.
earnings management is not an earnings quality . earnings management is one measure of earnings quality . the majority of researchers depend on it .
Earning management can be done through learning management expert but quality earning solely depends on person and it is according to the quality of person,which varies from person to person
https://www.researchgate.net/post/What_is_the_difference_between_earning_management_and_earning_quality
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