4 Measures of earnings quality in accounting theory and in empirical research in accounting
4.1 Earnings management
The literature on the subject offers many definitions of earnings management.1 A particularly noteworthy classification of definitions of earnings management is offered by J. Ronen and V. Yaari.2 They classify the definitions adopted in the literature according to the criterion of transparency and quality of financial statements. They speak of: ‘white’ earnings management, showing the beneficial consequences of these processes; ‘grey’ earnings management, indicating the benefits that can be obtained as a result of the process of earnings management while showing the negative consequences thereof at ...
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