Users

Abstract

In Chap. 3, we focused on management’s incentives to manage earnings. As an insider, management represents the supplier of earnings information. In this chapter, we focus on plain-vanilla users: those stakeholders who demand the earnings information so that they can evaluate the firm to conduct their business. In Chap. 5, we focus on a special group of users, monitors, or gatekeepers, who provide valuable signals to other users regarding the credibility and the informational value of the reported earnings.