- CFA Exams
- 2023 Level I
- Topic 3. Financial Statement Analysis
- Learning Module 26. Financial Reporting Quality
- Subject 1. Reporting Quality and Results Quality
Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Subject 1. Reporting Quality and Results Quality PDF Download
Financial reporting quality: a subjective evaluation of the extent to which financial reporting is free of manipulation and accurately reflects the financial condition and operating success of a company. It pertains to the information disclosed.
Earnings are considered to be high quality if they exhibit persistence and are unbiased. Sustainable earnings enable better forecasts of future cash flows or earnings. This is referred to as results quality or earnings quality.
Financial reporting quality is different from earnings quality. The two concepts are, however, interrelated because a correct assessment of earnings quality is possible only if we have some basic level of financial reporting quality. Low financial reporting quality makes it hard to assess earnings quality.
Learning Outcome Statements
compare and contrast financial reporting quality with the quality of reported results (including quality of earnings, cash flow, and balance sheet items);CFA® 2023 Level I Curriculum, Volume 3, Module 26
User Contributed Comments 4
User | Comment |
---|---|
sahilb7 | High Earnings Quality = Better forecasting |
Wassimes95 | thanks sahilb |
khalifa92 | High reporting quality - High earnings quality High reporting quality - Low earnings quality Low reporting quality - Low earnings quality |
Freddie33 | Khalifa are you just trying to confuse people? |

I used your notes and passed ... highly recommended!

Lauren
My Own Flashcard
No flashcard found. Add a private flashcard for the subject.
Add