This case uses the concepts of earnings quality and earnings management to illustrate the inherent ambiguity in the earnings measurement process. Accounting students are often uncomfortable with ambiguity. Students want faculty to provide them with a single correct answer, such as the precise earnings for a given time period. Accounting textbooks rarely address this perception; we have yet to find a textbook that illustrates a range of acceptable amounts. This case demonstrates that earnings can be, and often are, ambiguous in the real world.
Grey Paints: Using Earnings Quality Concepts to Clarify the Earnings Measurement Process
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Jerry G. Kreuze, Jack M. Ruhl; Grey Paints: Using Earnings Quality Concepts to Clarify the Earnings Measurement Process. Issues in Accounting Education 1 November 2002; 17 (4): 431–445. doi: https://doi.org/10.2308/iace.2002.17.4.431
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