Earnings Quality and Firm Performance: Exploring the Moderating Role Managerial Ability

Abstract

This study modifies the relationship between company performance and earnings quality using managerial ability. 50 South Asian manufacturing corporations' secondary data from 2014–2021.The study found that managerial ability boosts firm performance. Lower-performing firms also have lower earnings quality regression coefficients on cash flows than higher-performing firms.These findings show that low-performing companies are more likely than high-performing ones to boost earnings (i.e. increase their efforts to manage earnings). Managerial ability also boosts firms' performance's impact on earnings quality.