Interest in the quality of financial reports has increased, especially after the collapse of many international companies ... Which was caused by the boards of directors, which played a direct role in manipulating the numbers of financial statements and the involvement of many executives in the practice of managing profits unfairly, which negatively affected the quality of financial statements and shareholders' rights - and most of these collapses are due to the lack of accurate accounting information that helps to make rational decisions, which made the accounting profession questionable about its production of information that does not reflect the real economic reality of economic establishments, while others accused accounting institutions Auditing is the cause of corporate failure and therefore financial crises have called into question the effectiveness of auditing financial reports.
In recent years, the concept of earnings quality has attracted the attention of financial analysts, investors, managers and other market participants, as the main objective of financial statements is to provide high-quality financial information in decision-making.
Financial analysts believe that profits are the most important element in the inputs that are relied upon in the decision-making process, but relying on the profit figure only without taking into account the quality of those profits leads to making irrational decisions because of their focus on the amount of profits without focusing on their quality, and then the importance of the level of assurances on the quality of profits in decision-making becomes clear.
Here, it is clear that the responsibility of auditors according to Egyptian laws plays an important role in verifying the financial information that led to these profits and reducing the negative impact of the lack of quality of profits - as the auditors have the experience and skills in evaluating the ability of managers to manage profits and preserve the rights of shareholders who do not have financial information compared to managers in the company ... Since shareholders cannot fully observe the company's performance – as the amount of information available to them is reduced compared to management, and then the company's management may use the information available to it and the accounting flexibility allowed by accounting options in profit management to achieve personal benefits for management at the expense of the company, and then profit management affects the quality of profits and financial reports and thus shareholders' rights.
Here, the greatest burden falls on the role of auditors in ensuring the validity of the financial statements and reports and the extent of their fairness and freedom from judgmental estimates that reflect the opportunistic behavior of management, which negatively affects the quality of the financial statements - and therefore the quality of the audit helps to enhance confidence in the quality of the financial statements - one of the most important roles of auditors is to give confidence and credibility to the information contained in the financial statements of the users of those statements, and therefore the quality of the audit is a determining factor for the quality of the financial statements and the high quality of the audit is linked to The characteristics of the accounting and auditing facility and the volume of expertise available in it.