Financial Reporting Quality Analysis & Efficient Market Hypothesis Analysis

FINANCIAL REPORTING QUALITY
ANALYSIS
The upper Echelons Theory was used in the year 1984 by Hambrick and Mason, so as to focus
on how the economic diversity of the top management teams used to influence the firm’s out-
comes. They had laid down the organizational outcomes to be the “reflections of the values and
the cognitive bases of the powerful actors” in the business organizations. According to Hambrick
and Mason, corporate level decision making was significantly influenced by the firm’s strategic
choices and the performances. They were the prior one who had combined the roots and reasons
of the organizational actions with that of its values and cognitive bases of powerful actors. The
factors which tend to most affect the financial quality factory are the accounting choices, local
regulations, management integrity, incentives, supervision mechanisms, the international stan-
dard settings, etc. The article illustrates the 40 articles of the financial reporting techniques which
can also be attributed in detecting the variances in accounting choice.
In turn, when the accounting results are analysed, five individual and distinct categories are
grouped which also coincides with the existing streams of the accounting policies. The categories
are:
● Investigating Managerial Influence on the earnings management and quality.
● Recording various types of accounting irregularities, including the misstatements, re-
statements and fraud.
● Disclosing the quality of the transaction
● Investigating the managerial influence on the accounting conservatism.
● Managing the studies of accounting with the specific accounting options, as in, tax re-
lated accounting choices, assets impairments, and the timely submission of the audit re-
ports.
The upper Echelons Theory has laid down new criteria on judgement and decision making
research in the accounting and also by focussing on the personality and other traits of the in-
dividual hierarchies involved also considered as information producers in the accounts re-
lated decision making processes. The financial accounting outcomes, as influenced by the top