Earning quality is defined as how well firm's earnings represent future cash flows. Several factors affect earnings quality. Which statement is NOT TRUE?
Accounting users should assess the quality of a company's earnings because reported accounting earnings number is not exactly equal to economic earnings.
Current cash flow is a better proxy for future cash flows than current earnings
Earnings quality can be defined as the degree of correlation between accounting earnings and its economic income
Conservatism may decrease earnings quality. Get Accounting homework help today