The quality of a company's earnings is affected by the accounting estimates chosen by the company's management.

Question

Quizplus · Accepted Answer

Accounting estimates, such as depreciation, impairments, and provisions for doubtful debts, can have a significant impact on a company's financial performance and the quality of its earnings. As such, the choice of accounting estimates by the management can affect the accuracy and reliability of the company's financial statements and the perception of investors and stakeholders about the company's financial health.

The Quality of a Company's Earnings Is Affected by the Accounting