Question

A lot of research attempts to explain whether earnings is high quality. Suppose a researcher defined low quality earnings as earnings that was subject to a restatement because of either error or fraud. First, define construct validity and provide an argument about whether restatements have a high or low level of construct validity.

Answer 1

A ratio of more than 1.0 indicates that the company has high-quality profits, and a ratio of less than 1.0 indicates that the company has low-quality profits. Earnings quality refers to the amount of profit that comes from the same business operations, such as sales and operating expenses. Low-quality earnings as adjusted earnings. The results indicate that the market reaction to re-expression ads is greatly influenced by re-expression. Quality of profits. Specifically, the measure of build-up of profit quality is highly correlated with negative market reaction. This result provides evidence that investors are in tune with the implications of the low quality of earnings reported through build-up quality and that this awareness is reflected in stock prices before announcing a clearly observable equity scale. Poor quality of profits, accounting data.

Building health is the degree to which a test measures what it says or intends to measure. “In the classic test validity model, construct validity is one of the three main types of validity evidence, along with the validity of the content and the validity of the criteria. Validation is generally achieved by comparing the test to other tests that they measure similar characteristics to see how closely the two measurements are related. The creation of validity is most important in a test because it mainly measures the degree to which the test can measure the reason for its claims and claims to measure. This threat to validity occurs when other structures mask the effects of the measured construction. For example, self-esteem is affected by self-confidence and self-esteem. The effect of these structures should be incorporated into the research. Validity of construction is an assessment of how well your translation translates ideas or theories into real programs or measurements. Why is it important? Because when you think about the world or talk to others, who are you using words that represent concepts.