This paper examines how commonly used earnings quality measures fulfill a key objective of financial reporting, i.e., improving decision usefulness for investors. We propose a stock-price-based measure for assessing the quality of earnings quality measures. We predict that firms with higher...

We examine how cash flow forecasts affect the market reaction to analysts’ earnings forecast revisions and, in particular, the post earnings forecast revision drift. We find that the initial market reaction to earnings forecast revisions is stronger when cash flow forecasts are available. The...