The importance of assessing the earnings quality Earnings quality and, more generally, the quality of financial reporting are of interest to those who use financial reports for investment decisions and contracts. Moreover, it can be said that the views of the framers of the quality of financial reporting indirectly is indicative of the quality of financial reporting standards. Low earning quality is not desirable from the viewpoint of investors, since indicates the risks in the allocation of resources to the sector. Some of the most important factors in assessing the quality of earnings by Gradient Analysis group are as follows:Generate cash flow, quality of receivable accounts, the quality [measure] inventory, quality of fixed assets accounts, liabilities and disclosure quality, earnings management activity assessment, competitive environment, firm-specific factors, including the complexity of accounting estimates and events, breadth and depth of clientoriented companies, level and changes in legal fees, the nature of the debt contract, liquidity evaluation and pay off debts criteria, timing of publication of the financial statements, and the company's growth rate.