After you have conducted your research please share with the class approximately 1-2 paragraphs (less than 300 words).Arguments or positions are reasonable and supported with evidence from the research.Ideally, the initialposting fosters further discussion on the topic (in a reply response from your peer), perhaps exploring new lines of argumentor different perspectives. NOTE: Extensions are only permitted with the instructors permission.

The financial community in the United States has become increasingly concerned with the quality of reported company earnings.

Required:

1. Define the termearnings quality.
2. Explain the distinction between permanent and transitory earnings as it relates to the concept of earnings quality.
3. How do earnings management practices affect the quality of earnings?
4. Assume that a manufacturing company's annual income statement included a large gain from the sale of investment securities. What factors would you consider in determining whether or not this gain should be included in an assessment of the company's permanent earnings?