While CFOs caution that earnings
March 16, 2018
“While CFOs caution that earnings management is difficult to unravel from the outside, they suggest a number of red flags that point to potential misrepresentation. The three most common flags are persistent deviations between earnings and the underlying cash flows, deviations from industry and other peer experience, and large and unexplained accruals and changes in accruals.” – Earnings Quality: Evidence from the Field (Dichev, Graham, Harvey, Rajgopal)
