Which Statement About the Quality of Reported EPS Is False

question 12

Multiple Choice

Which statement about the quality of reported EPS is false?

• A)Earnings quality assessments are difficult to make and require considerable expertise in accounting and financial analysis.
• B)Reported EPS is not the precise figure that it first appears to be.
• C)It is necessary to make adjustments to reported EPS figures when
• Making cross-sectional comparisons.
• D)Quality of earnings is generally consistent among companies in the same
• Industry.

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Definitions:

Normative

Relates to establishing, relating to, or deriving from a standard or norm, particularly in the context of ethics or societal norms.

Instrumental

Characterized by practicality and utility, often prioritizing efficiency and effectiveness towards achieving a goal.

Rational

Pertaining to actions, decisions, or beliefs that are based on reason or logical analysis rather than emotions or irrational factors.

Collective Nature

The inherent characteristics or behaviors that emerge from the interactions and relationships within groups or societies.