Do firms substitute for low earnings quality? Australian evidence

Document Type

Conference publication

Publication details

Sinnewe, E & Harrison, JL 2012, 'Do firms substitute for low earnings quality? Australian evidence', Proceedings Accounting and Finance Association of Australia and New Zealand (AFAANZ) Conference, Melbourne, Vic., 1-3 July, AFAANZ, Melbourne, Vic.

Article available on Open Access

Peer Reviewed



This paper uses alternative earnings measures reported in earnings announcements issued by Australian firms to investigate whether companies subject to lower levels of earnings quality are more likely to voluntarily disclose an adjusted earnings figure. After controlling for other determinants of alternative earnings disclosure, we find that earnings quality is significantly negatively related to alternative earnings disclosure. This finding supports the view that firms use alternative ways to communicate underlying financial performance when confronted with low earnings quality.