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Basic Question 6 of 10
Select the correct statement(s).
II. Conservative accounting decisions by management can be interpreted as proof of high earnings quality.
I. More earnings management results in less earnings quality.
II. Conservative accounting decisions by management can be interpreted as proof of high earnings quality.
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Colin Sampaleanu
Learning Outcome Statements
describe the concept of sustainable (persistent) earnings;
describe indicators of earnings quality;
explain mean reversion in earnings and how the accruals component of earnings affects the speed of mean reversion;
CFA® 2025 Level II Curriculum, Volume 2, Module 14.