Earning quality is defined as how well firm's earnings represent future cash flows. Several factors affect earnings quality. Which statement is NOT TRUE?
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Accounting users should assess the quality of a company's earnings because reported accounting earnings number is not exactly equal to economic earnings.
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Current cash flow is a better proxy for future cash flows than current earnings
Earnings quality can be defined as the degree of correlation between accounting earnings and its economic income
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Conservatism may decrease earnings quality. Get Accounting homework help today
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