Quick Finance Tip - High and Low Financial Reporting Quality

​What is the major difference between High Financial Reporting Quality vs Low Financial Reporting Quality? High Financial Reporting Quality results in a fair presentation of a company’s operations and financial position. Low Financial Reporting Quality includes some of the following activities: (1) Following GAAP but selecting alternatives within GAAP that bias or distort results; (2) Using loopholes in accounting principles; (3) Using unrealistic or inappropriate estimates/assumptions; (4) Stretching accounting principles to achieve desired outcome; and (5) Engaging in fraudulent financial reporting.