Assessing the Quality of Earnings: A Survey of Financial Statement Users's Perceptions Towards the Reporting Importance of Selected Categories of Information (Survey‪)‬

ABSTRACT The earnings of an enterprise provide indications of both future cash flows and future earnings. To the extent the current rules of accounting measurement contaminates the quality of earnings, it would hinder such indications. The objective of this research is twofold: to investigate the reporting importance of selected categories of information vis-a-vis assessment of the quality of earnings; and, to compare the perceptions of different user groups concerning the said reporting importance. To achieve the research objectives, two hypotheses were formulated and a mailed survey was used to collect the data. Appropriate statistical methods were used to test the research hypotheses. The findings, with one exception, did not reveal any significant differences among the perceived reporting importance of different categories of information. The findings, however, did demonstrate the existence of significant differences among the perceptions of various user groups concerning the reporting importance of the information. The results of this study may assist standard setters to promulgate "localized" financial reporting standards. Such environmentally specific standards would enhance financial statements users' ability to assess both future cash flows and future earnings.