Ifrs Adoption And Accounting Quality

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The Effect of IFRS Adoption on Accounting Quality and Market Liquidity

Author : Sidney Leung
Publisher :
ISBN 13 :
Total Pages : 37 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Effect of IFRS Adoption on Accounting Quality and Market Liquidity by : Sidney Leung

Download or read book The Effect of IFRS Adoption on Accounting Quality and Market Liquidity written by Sidney Leung and published by . This book was released on 2018 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Previous studies suggest that firm-level reporting incentives play a significant role for heterogeneous effects on the adoption of International Financial Reporting Standards (IFRS) (e.g., Daske et al., 2013; Ball et al., 2003; Leuz et al., 2003; Burgstahler et al., 2006). In this study, we focus on family ownership control, which arguably creates severe agency problems between controlling and minority shareholders as well as weaker incentives for quality financial reporting and transparency. We examine whether the effect of full IFRS adoption on accounting quality and market liquidity is significantly mitigated by family control by comparing accounting quality metrics and market liquidity metrics between family-controlled and non-family-controlled firms listed in Hong Kong for the period before mandatory IFRS adoption and the period after adoption. We show that accounting quality and market liquidity generally improve after full IFRS adoption. However, when we take into consideration of family control, higher accounting quality in the post-IFRS period is only substantiated in the non-family-controlled firms. The accounting quality actually gets worse in the post-IFRS period for family-controlled firms. We also find that improvements in market liquidity after the adoption of IFRS are moderated by family control. The results indicate that the expected benefits of IFRS adoption are realised in non-family-controlled firms, but such desirable outcomes are severely moderated by family ownership control. Given that family control is a common phenomenon in Asia and other emerging economies, our findings are useful for policy makers and investors to better understand the impact of IFRS adoption.

The German Financial System

Author : Jan Pieter Krahmen (editor)
Publisher :
ISBN 13 : 0199253161
Total Pages : 550 pages
Book Rating : 4.1/5 (992 download)

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Book Synopsis The German Financial System by : Jan Pieter Krahmen (editor)

Download or read book The German Financial System written by Jan Pieter Krahmen (editor) and published by . This book was released on 2004 with total page 550 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by a team of scholars, predominantly from the Centre for Financial Studies in Frankfurt, this volume provides a descriptive survey of the present state of the German financial system and a new analytical framework to explain its workings.

The Impact Of IFRS Adoption On Accounting Quality

Author : Erick Outa
Publisher : LAP Lambert Academic Publishing
ISBN 13 : 9783847374930
Total Pages : 364 pages
Book Rating : 4.3/5 (749 download)

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Book Synopsis The Impact Of IFRS Adoption On Accounting Quality by : Erick Outa

Download or read book The Impact Of IFRS Adoption On Accounting Quality written by Erick Outa and published by LAP Lambert Academic Publishing. This book was released on 2012-07 with total page 364 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book contributes to the debates on the impact of the adoption of International Financial Reporting Standards (IFRS) on accounting quality. It improves on previous quantitative methods and testing conditions to find out whether IFRS has improved the quality of accounting in addition to using qualitative methods to verify the findings. The study has applied data from Kenya, but the approach and analysis is global thus, making the book widely acceptable around the world. The apex of the book is the measurement of the impact that IFRS adoption has had on the accounting quality for companies listed in Kenya and how these compares with the rest of the word. The global comparative theme is consistent throughout the book. This book is relevant for post-graduate students, professional and corporate accounting professionals, regulators of financial markets, accounting institutes, standard setting bodies and researchers in the area of financial reporting.

Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization

Author : Bayar, Yilmaz
Publisher : IGI Global
ISBN 13 : 1799844609
Total Pages : 699 pages
Book Rating : 4.7/5 (998 download)

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Book Synopsis Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization by : Bayar, Yilmaz

Download or read book Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization written by Bayar, Yilmaz and published by IGI Global. This book was released on 2020-11-06 with total page 699 pages. Available in PDF, EPUB and Kindle. Book excerpt: Globalization is a multi-dimensional concept reflecting the increased economic, social, cultural, and political integration of countries. There has been no pinpointed consensus on the history of globalization; however, the globalization process has gained significant speed as of the 1980s in combination with liberalization. Many countries have removed or loosened barriers over the international flows of goods, services, and production factors. In this context, both liberalization and globalization have led to considerable institutional, economic, social, cultural, and political changes in the world. The liberalization and globalization processes have affected economic units, institutions, cultures, social lives, and national and international politics. The Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization provides a comprehensive evaluation of the institutional, economic, and social impacts of globalization and liberalization processes across the world. While highlighting topics like economics, finance, business, and public administration, this book is ideally intended for government officials, policymakers, practitioners, stakeholders, researchers, and academicians interested in the international impacts of globalization and liberalization across a variety of different domains.

IFRS Adoption and Accounting Quality

Author : Naomi S. Soderstrom
Publisher :
ISBN 13 :
Total Pages : 45 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis IFRS Adoption and Accounting Quality by : Naomi S. Soderstrom

Download or read book IFRS Adoption and Accounting Quality written by Naomi S. Soderstrom and published by . This book was released on 2007 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2002, the European Union (EU) Parliament passed a regulation that requires consolidated and simple accounts for all companies listed in the EU to use International Financial Reporting Standards (IFRS) for fiscal years starting after January 1, 2005. This change in accounting systems will have a large impact on the information environment for EU companies. This paper provides a review of the literature on adoption of different GAAPs. We thus provide background and guidance for researchers studying the change in accounting quality following widespread IFRS adoption in the EU. We argue that cross-country differences in accounting quality are likely to remain following IFRS adoption because accounting quality is a function of the firm's overall institutional setting, including the legal and political system of the country in which the firm resides.

Earnings Quality

Author : Jennifer Francis
Publisher : Now Publishers Inc
ISBN 13 : 1601981147
Total Pages : 97 pages
Book Rating : 4.6/5 (19 download)

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Book Synopsis Earnings Quality by : Jennifer Francis

Download or read book Earnings Quality written by Jennifer Francis and published by Now Publishers Inc. This book was released on 2008 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.

Incentives or Standards

Author : Hans Bonde Christensen
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Incentives or Standards by : Hans Bonde Christensen

Download or read book Incentives or Standards written by Hans Bonde Christensen and published by . This book was released on 2015 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the impact of managerial financial reporting incentives on accounting quality changes around International Financial Reporting Standards (IFRS) adoption. A novel feature of our single-country setting based on Germany is that voluntary IFRS adoption was allowed and common before IFRS became mandatory. We exploit the revealed preferences in the choice to (not) adopt IFRS voluntarily to determine whether the management of individual firms had incentives to adopt IFRS. For comparability with previous studies, we assess accounting quality through multiple constructs such as earnings management, timely loss recognition, and value relevance. While most existing literature documents accounting quality improvements following IFRS adoption, we find that improvements are confined to firms with incentives to adopt, that is, voluntary adopters. We also find that firms that resist IFRS adoption have closer connections with banks and inside shareholders, consistent with lower incentives for more comprehensive accounting standards. The overall results indicate that reporting incentives dominate accounting standards in determining accounting quality. We conclude that it is unwarranted to infer from evidence on accounting quality changes around voluntary adoption that IFRS per se improves accounting quality.

The Impact of International Financial Reporting Standards (IFRS) Adoption on the Accounting Quality of Listed Companies in Kenya

Author : Erick Rading Outa
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Impact of International Financial Reporting Standards (IFRS) Adoption on the Accounting Quality of Listed Companies in Kenya by : Erick Rading Outa

Download or read book The Impact of International Financial Reporting Standards (IFRS) Adoption on the Accounting Quality of Listed Companies in Kenya written by Erick Rading Outa and published by . This book was released on 2014 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study seeks to establish if the adoption of International Financial Reporting Standards (IFRS) in Kenya has been associated with higher accounting quality for listed companies based on the theory that IFRS adoption has benefits such as transparency, accounting quality and reduced cost of capital. By applying quantitative techniques and responding to suggestions on country specific studies, accounting quality measures of earnings management, timely loss recognition and value relevance were analyzed. There was increased variability in earnings in the post adoption period as analyzed by Levenes test for variances with f and p values of 0.000 (.05). While the variability of change in earnings to variability of change in cash flows showed insignificant decline, analysis based on rank sum tests indicated u=0.0 and p=0.317 implying insignificant difference between the pre and post cash flow and earnings ratio variance. The Spearman correlation between cash flow and accruals as analyzed by Cramer's test reported a p =.157, that is p5. The rest of the measures showed insignificant variations. Previous research examined the effects of IFRS adoption mainly in the EU on the impact of IFRS adoption using quantitative techniques with literature citing gaps and conflicting conclusions on accounting quality changes. In contrast, the current research in a common law developing country has shown that IFRS insignificantly improves accounting quality under different circumstances which can be generalized in developing countries. This contribution matters as it implies more debates and better methods to be researched on while adopters to be assured that insignificant improvements appear to be related to compliance and adoption strategies most of which are continuously addressed by the Standard setters and regulators.

IFRS Adoption and Financial Reporting Quality

Author : Habeeb Mohamed Nijam
Publisher :
ISBN 13 :
Total Pages : 14 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis IFRS Adoption and Financial Reporting Quality by : Habeeb Mohamed Nijam

Download or read book IFRS Adoption and Financial Reporting Quality written by Habeeb Mohamed Nijam and published by . This book was released on 2016 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional and commonly held wisdom with respect to the adoption of International Financial Reporting Standards (IFRS) is that they lead to improved financial reporting quality and comparability and thereby favorable economic consequences. There are however contradicting evidences disproving this conventional wisdom or rejecting its gross generalization over the entire jurisdictions harmonizing on IFRS. Driven by this fact, quests for knowledge about the dynamics and contexts that lead to differential effects of IFRS get momentum. In an attempt to explore the insight into the effects of international accounting harmonization by way of IFRS adoption, this paper reviews selected literatures on consequences of IFRS adoption. This review discusses some empirical evidences that have been reported in various countries that include Europe, USA, United Kingdom, Germany, Spain, Norway, Greece, Poland, Belgian, France, Italy, Turkey, United Arab Emirates (UAE), Kuwait, Jordan, China, Malaysia, Australia, Hong Kong, New Zealand, Kenya and Nigeria. Our review focuses on the aspects of value relevance, disclosure quality, cost of capital, earning management and financial statement impact due to the IFRS adoption. This review reveals that economic consequences of IFRS adoption significantly differ across jurisdictions though being its impact reported to be positive in majority of cases. There are also notable number of studies that report indifferent and or negative effects of IFRS adoption. When IFRS studies report mixed evidence with respect to value relevance of book value of equity and earing, book value of equity supersedes the earning parameters. IFRS are found to supersede many other domestic financial reporting standards in terms of volume and quality of disclosures in financial statements. This review also obtains that IFRS' impact on the reduction of cost of capital depends on financial reporting incentives, law enforcement, types of legal systems and various other country and capital market specific characteristics. Further, though there are some evidences to the contrary, the quality of earnings reported under IFRS has been established to be superior to that under other local standards.

The Role of International Financial Reporting Standards in Accounting Quality

Author : Huifa Chen
Publisher :
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis The Role of International Financial Reporting Standards in Accounting Quality by : Huifa Chen

Download or read book The Role of International Financial Reporting Standards in Accounting Quality written by Huifa Chen and published by . This book was released on 2011 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Previous studies on the effect of International Financial Reporting Standards (IFRS) on accounting quality often have difficulties to control for confounding factors on accounting quality. As a result, the observed changes in accounting quality could not be attributed mainly to IFRS. We use a unique research setting to address this issue by comparing the accounting quality of publicly listed companies in 15 member states of the European Union before and after the full adoption of IFRS in 2005. We use five indicators as proxies for accounting quality. We find that the majority of accounting quality indicators improved after IFRS adoption in the European Union. That is, there is less of managing earnings towards a target, a lower magnitude of absolute discretionary accruals, and higher accruals quality. But our results also show that firms engage in more earnings smoothing and recognize large losses in a less timely manner in post-IFRS periods. In addition, we examine the effects of institutional variables on financial reporting quality. Our contribution to the literature is that we show the improved accounting quality is attributable to IFRS, rather than changes in managerial incentives, institutional features of capital markets, and general business environment, etc.

Handbook of Research on Global Issues in Financial Communication and Investment Decision Making

Author : Hasan Dinçer
Publisher : Business Science Reference
ISBN 13 : 9781522592655
Total Pages : 0 pages
Book Rating : 4.5/5 (926 download)

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Book Synopsis Handbook of Research on Global Issues in Financial Communication and Investment Decision Making by : Hasan Dinçer

Download or read book Handbook of Research on Global Issues in Financial Communication and Investment Decision Making written by Hasan Dinçer and published by Business Science Reference. This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This book examines the significance of financial communication in competitive business environments"--

Mandatory IFRS Adoption, Corporate Governance, and Accounting Accruals in the UK and Germany

Author : Jian Liang
Publisher :
ISBN 13 :
Total Pages : 27 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Mandatory IFRS Adoption, Corporate Governance, and Accounting Accruals in the UK and Germany by : Jian Liang

Download or read book Mandatory IFRS Adoption, Corporate Governance, and Accounting Accruals in the UK and Germany written by Jian Liang and published by . This book was released on 2016 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the impacts of mandatory adoption of International Financial Reporting Standards (IFRS) and corporate governance on accounting accruals in the UK and Germany. There has been a long debate on whether mandating a single set of high quality accounting standards, i.e. IFRS, leads to higher quality of accounting earnings. Some treat accounting standards as the sole determinant of accounting quality and find higher quality of accounting numbers in IFRS adoption countries; while others show that reporting incentives dominate accounting standards in determining accounting quality. Using hand-collected corporate governance data in companies' annual reports throughout the sample period 2001-2013, we operationalize reporting incentives by constructing a score that rates the overall effectiveness of a firm's corporate governance and highlight the following main findings. First, the magnitude of discretionary accruals in our sample has not changed since the 2005 mandatory IFRS adoption; meanwhile, the volatility of accrual residuals estimated by Dechow and Dichev (2002) model has become larger in IFRS adoption period, suggesting lower quality of IFRS accounting numbers. Second, firms with better corporate governance and therefore less earnings management incentive are associated with higher accounting quality, i.e. smaller sizes of discretionary accruals and lower volatilities of accrual residuals. Our results are in line with Ball et al. (2003), suggesting that incentives act as a deciding factor in improving accounting quality.

IFRS Adoption in Research and Development Companies

Author : Yusuf Nulla
Publisher :
ISBN 13 :
Total Pages : 15 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis IFRS Adoption in Research and Development Companies by : Yusuf Nulla

Download or read book IFRS Adoption in Research and Development Companies written by Yusuf Nulla and published by . This book was released on 2014 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: Globally, the use of the IFRS in financial reporting is the requirement in many countries. However, the question of whether such a global transition towards a single set of accounting standards has been met by the presumed benefits of higher accounting quality and comparability yet remains unanswered. This paper primarily examines the effect of the mandatory IFRS adoption in Canada by the research and development companies. It was a comparative study between the Canadian GAAP financial reporting from 2008 to 2010 and IFRS financial reporting from 2011 to 2012. Since this research is an empirical study, the quantitative research method is applied. The research question of this research study is: Does IFRS adoption improve accounting quality in research and development companies? This research finds that lower persistency and predictability in earnings; decrease in earnings influence to shareholder value; weak volatility in market price; better predictability of cash flow and financial forecasts; increase in accruals and timeliness loss of recognition; and decrease in research and development expenditures.

Do Industry Specialist Auditors Enhance Financial Reporting Quality?

Author : Jose G. Vega (III)
Publisher :
ISBN 13 : 9781303921261
Total Pages : 124 pages
Book Rating : 4.9/5 (212 download)

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Book Synopsis Do Industry Specialist Auditors Enhance Financial Reporting Quality? by : Jose G. Vega (III)

Download or read book Do Industry Specialist Auditors Enhance Financial Reporting Quality? written by Jose G. Vega (III) and published by . This book was released on 2014 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates whether industry specialist auditors add quality to their clients' audited financial statements under the principles-based International Financial Reporting Standards (IFRS) when compared to non-specialists. It is likely that auditor experience and knowledge plays a more important role in evaluating the overall quality when principles-based IFRS standards are in effect. This study examines the effect of adopting a principles-based standard on the accounting quality of both industry specialist and non-specialist clients and whether joint EU and country industry specialist auditors add additional value relative to auditors that are deemed either EU or country industry specialists only. I also examine if the gap between local gap and IFRS affects accounting quality. The results suggest that the mandatory adoption of IFRS positively affected accounting quality among firms in the European Union countries. This positive effect is equal to between 7 to 9 percent of pre-tax earnings of non-specialist clients. The results show that Country industry specialist clients still provides high accounting quality relative to non-specialists clients in post-adoption period. The gap difference in accounting quality between the country industry specials and non-specialist is decreased from the pre-and post-adoption period. However, the EU industry specialist clients experience a positive effect with the adoption of IFRS. The results suggest that countries with different level of GAAP difference experience different effect on accounting quality with the mandatory adoption of IFRS. While countries with small gap differences benefit from the adoption of IFRS, the EU industry specialist model suggests that countries with large GAAP difference experience the greatest benefit. The results further find that different classification of industry specialist provides different levels of accounting quality. Country only industry specialist clients provide the highest level of accounting quality. EU and country and EU only clients experience positive effects with the mandatory adoption of IFRS and provide similar accounting quality as non-specialist clients. The results of this study are highly relevant, not only in light of the recent waves of IFRS adoption, but also in light of the recent audit reforms in Europe, which include rules that address mandatory audit rotation, dual audits, and market concentration.

The Impact of the Adoption of International Financial Reporting Standards on the Quality of Accounting Information of the Brazilian and European Public Firms

Download The Impact of the Adoption of International Financial Reporting Standards on the Quality of Accounting Information of the Brazilian and European Public Firms PDF Online Free

Author : Edilson Paulo
Publisher :
ISBN 13 :
Total Pages : 16 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Impact of the Adoption of International Financial Reporting Standards on the Quality of Accounting Information of the Brazilian and European Public Firms by : Edilson Paulo

Download or read book The Impact of the Adoption of International Financial Reporting Standards on the Quality of Accounting Information of the Brazilian and European Public Firms written by Edilson Paulo and published by . This book was released on 2013 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Several factors affect the quality of accounting information, such as characteristics of the firm, practices and procedures adopted in the elaboration of the financial statements, corporative governance system, capital market, regulation, among others. Among these factors, it is noteworthy the influence of the accounting standards about the quality of the numbers reported by the firms. Since 2005, the European companies elaborated their consolidated financial statements according to the International Financial Reporting Standards (IFRS), while in Brazil, the process of convergence of national accounting standards to IFRS was promoted just after the approval of the Law no 11.638/07, therefore, after that, the Comitê de Pronunciamentos Contábeis (CPC) approved various Technical Pronouncements which aimed to facilitate the convergence of Brazilian accounting standards to these international rules. Considering that these international accounting standards have a higher quality, it is expected that the IFRS adoption affect positively accounting information quality. Thus, this research aims to analyze the effect of the IFRS adoption in the earnings quality reported by the Brazilian and European public firms, in the period between 2000 and 2011, considering that previous research did not showed a consensus about this topic. Empirical technical models, such as persistence, conservatism, earnings management and accruals errors, were used to reach the proposed objective. The results showed that the quality of accounting information has not significantly improved comparing the period before and after the adoption of the IFRS in Brazil or Europe.

Standardization of Financial Reporting and Accounting in Latin American Countries

Author : Lourenço, Isabel
Publisher : IGI Global
ISBN 13 : 1466684542
Total Pages : 371 pages
Book Rating : 4.4/5 (666 download)

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Book Synopsis Standardization of Financial Reporting and Accounting in Latin American Countries by : Lourenço, Isabel

Download or read book Standardization of Financial Reporting and Accounting in Latin American Countries written by Lourenço, Isabel and published by IGI Global. This book was released on 2015-07-01 with total page 371 pages. Available in PDF, EPUB and Kindle. Book excerpt: Accounting has often been described as the language of business. As the increasing competition of overseas markets begins to affect even the smallest local companies, many more business professionals must become fluent in accounting principles and practice. Standardization of Financial Reporting and Accounting in Latin American Countries highlights the recent move to International Financial Reporting Standards (IFRS) and addresses some of the concerns raised due to cultural differences and the level of enforcement of these standards in separate countries. Describing the evolution of both financial and managerial accounting due to the adoption of IFRS, this book is an essential reference source for both students and seasoned professionals in the fields of accounting, finance, and related management fields, especially those with an international emphasis.

Earnings Quality

Author : Elisa Menicucci
Publisher : Springer Nature
ISBN 13 : 3030367983
Total Pages : 154 pages
Book Rating : 4.0/5 (33 download)

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Book Synopsis Earnings Quality by : Elisa Menicucci

Download or read book Earnings Quality written by Elisa Menicucci and published by Springer Nature. This book was released on 2019-12-21 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides an overview of earnings quality (EQ) in the context of financial reporting and offers suggestions for defining and measuring it. Although EQ has received increasing attention from investors, creditors, regulators, and researchers in different areas, there are various definitions of it and different approaches for its measurement. The book describes the relationship between EQ and earnings management (EM) since they can be considered related challenges, especially in the context of international financial reporting standards (IAS/IFRSs). EM occurs when managers make discretionary accounting choices that are regarded as either an efficient communication of private information to improve the informativeness of a firm’s current and future performance, or a distorting disclosure to mislead the firm’s true performance. The intentional manipulation of earnings by managers, within the limits allowed by the accounting standards, may alter the usefulness of financial reporting and lead to lower quality of earnings. The use of fair value in financial reporting has created a current debate about the impact it might have on EQ. At times, the high subjectivity in estimating fair value can allow opportunities for the exercise of management judgments and intentional bias, which can reduce the quality of financial reporting. Management discretion can result in high EM and hence in a reduction of EQ. Particularly during difficult financial periods, managers engage in EM to mask the negative effects of the turmoil, and in such circumstances accruals and earnings smoothing are attempts to reduce abnormal variations of earnings in such circumstances. This book is a valuable resource for those interested in wider perspectives on EQ and it adds to the research studies on this topic in the context of financial reporting.