企业盈利质量分析中英文对照外文翻译文献
企业盈利质量分析中英文对照外文翻译文献
  企业盈利质量分析中英文对照外文翻译文献
英文翻译中文翻译  (文档含英文原文和中文翻译)
  原文：
  Measuring the quality of earnings
  1. Introduction
  Generally accepted accounting principles (GAAP) offer some flexibility in preparing the financial statements and give the financial managers some freedom to select among accounting policies and alternatives. Earning management uses the flexibility in financial reporting to alter the financial results of the firm (Ortega and Grant, 2003).
  In other words, earnings management is manipulating the earning to achieve a
  企业盈利质量分析中英文对照外文翻译文献
  predetermined target set by the management. It is a purposeful intervention in the external reporting process with the intent of obtaining some private gain (Schipper, 1989).
  Levit (1998) defines earning management as a gray area where the accounting is being perverted; where managers are cutting corners; and, where earnings reports reflect the desires of management rather than the underlying financial performance of the company.
  The popular press lists several instances of companies engaging in earnings management. Sensormatic Electronics, which stamped shipping dates and times on sold merchandise, stopped its clocks on the last day of a quarter until customer shipments reached its sales goal. Certain business units of Cendant Corporation inflated revenues nearly $500 million just prior to a merger; subsequently, Cendant restated revenues and agreed with the SEC to change revenue recognition practices. AOL restated earnings for $385 million in improperly deferred marketing expenses. In 1994, the Wall Street Journal detailed the many ways in which General Electric smoothed earnings, including the caref
ul timing of capital gains and the use of restructuring charges and reserves, in response to the article, General Electric reportedly received calls from other corporations questioning why such common practices were “front-page〞 news.
  Earning management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers (Healy and Whalen, 1999).
  Magrath and Weld (2002) indicate that abusive earnings management and fraudulent practices begins by engaging in earnings management schemes designed primarily to “smooth〞 earnings to meet internally or externally imposed earnings forecasts and analysts’ expectations.
  Even if earnings management does not explicitly violate accounting rules, it is an ethically questionable practice. An organization that manages its earnings sends a
  企业盈利质量分析中英文对照外文翻译文献
  message to its employees that bending the truth is an acceptable practice. Executives who partake of this practice risk creating an ethical climate in which other questionable activities may occur. A manager who asks the sales staff to help sales one day forfeits the moral authority to criticize questionable sales tactics another day.
  Earnings management can also become a very slippery slope, which relatively minor accounting gimmicks becoming more and more aggressive until they create material misstatements in the financial statements (Clikeman, 2003)
  The Securities and Exchange Commission (SEC) issued three staff accounting bulletins (SAB) to provide guidance on some accounting issues in order to prevent the inappropriate earnings management activities by public companies: SAB No. 99 “Materiality〞, SAB No. 100 “Restructuring and Impairment Charges〞 and SAB No. 101 “Revenue Recognition〞.
  Earnings management behavior may affect the quality of accounting earnings, which is defined by Schipper and Vincent (2003) as the extent to which the reported earnings faith
fully represent Hichsian economic income, which is the amount that can be consumed (i.e. paid out as dividends) during a period, while leaving the firm equally well off at the beginning and the end of the period.
  Assessment of earning quality requires sometimes the separations of earnings into cash from operation and accruals, the more the earnings is closed to cash from operation, the higher earnings quality. As Penman (2001) states that the purpose of accounting quality analysis is to distinguish between the “hard〞 numbers resulting from cash flows and the “soft〞 numbers resulting from accrual accounting.
  The quality of earnings can be assessed by focusing on the earning persistence; high quality earnings are more persistent and useful in the process of decision making.
  Beneish and Vargus (2002) investigate whether insider trading is informative about earnings quality using earning persistence as a measure for the quality of earnings, they find that income-increasing accruals are significantly more persistent for firms with abnormal insider buying and significantly less persistent for firms with abnormal insider se
lling, relative to firms which there is no abnormal insider trading.

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