A Quality of Earnings Report (QoE) is simply about Trust and Relationships.
Valuing and selling a business only works when the seller and buyer trust each other.
A QoE allows the seller to show they have confidence in their financial statements as they have hired and paid for an independent third party to analyze and provide a written report about the recent financial performance of the business. This offering of trust, then allows the buyer and seller to build a relationship to see if buying the business is right for the buyer and the right exit strategy for the seller.
For a QoE to be accurate and relevant, a Certified Analyst prepares a set of financial statements of a business from the last 2 full years of operation, so it presents an accurate statement of EBITDA.