THE RELATIONSHIP BETWEEN INSTITUTIONAL OWNERSHIP AND EARNINGS QUALITY

Earnings are one of the most essential elements considered by managers and are a measure of efficiency. Earnings quality has been considered and evaluated by many researchers. The managers’ authority to use the fulfillment and compliance principles and also estimation and prediction are factors that will affect the quality of earnings. On the one hand, it is expected to prepare information in such a way that reflects the company status in the best because they have more knowledge of the company. On the other hand the manager may manifest the company status intentionally or unintentionally due to maintaining the company, receiving rewards and other factors. Thus, the companies’ earnings quality is influenced by the fundamentals of reporting and discretion of managers. Research studies indicate that the presence of institutional investors improves the predictive value, the value of feedback and honest reporting of financial statements. In addition, these investors in these companies' ownership structure will cause the financial statements to be reported on time and sooner. There is a significant relationship between institutional ownership and earnings quality and the ownership structure will increase the quality of financial information and earnings quality.

Institutional Ownership, Quality Of Earnings, Corporate Governance, Sustainability Gains