skip to main content
Language:
Search Limited to: Search Limited to: Resource type Show Results with: Show Results with: Search type Index

Survey Research on Earnings Quality: Evidence from Japan

Research on Professional Responsibility and Ethics in Accounting, 2019, Vol.22, p.99-131

Copyright © 2019 Emerald Publishing Limited ;ISSN: 1574-0765 ;ISBN: 9781789733709 ;ISBN: 1789733707 ;EISBN: 1789733693 ;EISBN: 9781789733693 ;DOI: 10.1108/S1574-076520190000022007 ;OCLC: 1120697654 ;LCCallNum: HF5601-5689

Full text available

Citations Cited by
  • Title:
    Survey Research on Earnings Quality: Evidence from Japan
  • Author: Nakashima, Masumi
  • Subjects: Accounting & finance
  • Is Part Of: Research on Professional Responsibility and Ethics in Accounting, 2019, Vol.22, p.99-131
  • Description: Abstract This study focuses on a survey of chief financial officers (CFOs) in public firms in Japan concerning the following six points: the importance of the definition earnings quality; higher quality earnings; the determinants of earnings quality; prevalence, magnitude, and motivation of earnings management; accounting that influences earnings quality; and misrepresenting of earnings. The results are following: first, Japanese CFOs define earnings quality as earnings accurately reflecting economic reality, earnings accurately reflecting the results of operations, and earnings backed by cash flows, earnings sustainability, recurring, and consistent, and earnings reflecting long-term trend importance. Second, Japanese firms consider earnings that reflect consistent reporting choices over time as higher quality. They do not consider that earnings having accruals that are eventually realized as cash flow as higher earnings quality. Third, Japanese CFOs indicate that 30% of earnings quality is impacted by firm characteristics such as firm’s business model, industry, and macroeconomic conditions. Surprisingly, the influence of the board of directors is greater than the impact of their internal controls. Fourth, as for the determinants of earnings quality, CFOs consider that more than 70% of Japanese CFOs do not allow the discretion and that accounting standards limit their ability to report higher earning quality. Fifth, Japanese CFOs consider that higher earnings are influenced by accounting principles such as policies that match expenses with revenues and policies that rely on fair value accounting as much as possible. Sixth, CFOs themselves predict that 50% of Japanese firms use discretions and that they use 20% of earnings per share (EPS). Since there is inside and outside pressure to hit earnings benchmarks, Japanese firms possess the motivation to use earnings to misrepresent economic performance, Japanese managers see a red flag when generally accepted accounting principle’s earnings do not correlate with cash flow from operations.
  • Publisher: United Kingdom: Emerald Publishing Limited
  • Language: English
  • Identifier: ISSN: 1574-0765
    ISBN: 9781789733709
    ISBN: 1789733707
    EISBN: 1789733693
    EISBN: 9781789733693
    DOI: 10.1108/S1574-076520190000022007
    OCLC: 1120697654
    LCCallNum: HF5601-5689
  • Source: Ebook Central Academic Complete
Back to results list
INSPIRE LIBRARY - TON DUC THANG UNIVERSITY (84-028) 37 755 057 Feedback
19 Nguyen Huu Tho St. Dist.7, HCM thuvien@tdtu.edu.vn

Copyright © 2017 INSPIRE LIBRARY - TON DUC THANG UNIVERSITY

Searching Remote Databases, Please Wait