In this study, I develop a measure of earnings quality by using qualitative characteristics of financial statement information specified in the Statement of Financial Accounting Concepts (SFAC) No. 2 (FASB 1980). I derive a summary measure of earnings quality by applying factor analysis on...

This study examines whether firms with profits before accruals management are more likely than firms with losses before accruals management to meet or exceed earnings benchmarks when pre-managed earnings are below those benchmarks. We extend <link rid="b6">Brown (2001)</link> by documenting that the differential...