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Quality of Earnings: Window Dressing, Creative Financial Practices and Issues Related to Quality of Disclosures in Reported Earnings

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Window dressing of financial statements is resorted to by the managements to portray a rosier performance and financial position of the company than actuals to suit their motives. An analyst needs to beat window dressing for a meaningful assessment of the quality of earnings.

CHAPTER OBJECTIVES

This chapter seeks to enable you to develop knowledge and understanding of:

  1. What is quality of earnings and its significance in evaluating corporate performance.
  2. Limitations of financial statements caused by leverage ...

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