SYNOPSIS This short essay addresses the inordinate amount of attention given in the literature to two seemingly widely-held but questionable beliefs: that a major role of financial reporting is providing new information for equity investors, and that “earnings management” is rampant. In this essay, I discuss these beliefs, indicate why I consider them “most incorrect,” and offer conjectures on why they have not been corrected.
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Ray Ball (2013) studied this question.
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