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ACCOUNTING THEORY- EARNINGS QUALITY Economic income is considered to be a better predictor of future cash flows than accounting income. A technique used by security
ACCOUNTING THEORY- EARNINGS QUALITY
Economic income is considered to be a better predictor of future cash flows than accounting income. A technique used by security analyst to determine the degree of correlation between firms accounting earnings and its true economic income is quality of earnings assessment.
Required;
a. Discuss measures that may be used to assess the quality of a firms reported earnings.
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