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Quality Accounting in Indian Pharmaceutical Companies: A Review

Journal: Oblik i finansi (Vol.1, No. 74)

Publication Date:

Authors : ;

Page : 16-24

Keywords : quality accounting; quality of earnings; quality of revenue; operating income; creative accounting practices; pharmaceutical companies;

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Quality earnings are free from discretionary choices by the management and most valued by shareholders. The present study highlights the “quality” aspect of accounting (earnings) by analyzing the creative accounting practices of pharmaceutical companies in India, untouched so far. It has been analyzed on three key parameters: quality of earnings, quality of revenue and z score for stability. Further, the market performance of these companies has been regressed with respect to quality factor for finding out the market reaction. The results show that the quality factor of revenue and earnings is low in these companies. It is hoped that the study improves shareholders' perception about the financial results reported by the companies.

Last modified: 2017-01-18 04:29:54