The Impact of Financial Distress on Earnings Management | ||
| مجلة البØوث التجارية | ||
| Article 28, Volume 46, Issue 1, January 2024, Pages 36-72 PDF (773.61 K) | ||
| Document Type: تجاریة کل ما یتعلق بالعلوم التجاریة | ||
| DOI: 10.21608/zcom.2023.224150.1276 | ||
| Authors | ||
| مني السيد منصور* 1; إبراهيم Ù…Øمد علي2 | ||
| 1كليه تجاره شعبه اللغه الانجيليزيه جامعه الزقازيق | ||
| 2كليه تجاره جامعه الزقازيق | ||
| Abstract | ||
| This study investigates the impact of financial distress on earnings management approaches (real and accruals earnings management). Using a sample of listed firms in Egypt during the period of 2014-2019. Four proxies for measuring accruals and real earnings management; namely discretionary accruals, abnormal cash flows from operations, abnormal production cost, and abnormal discretionary expenses are employed. Four empirical models are developed in which earnings management proxies are the dependent variables and the independent variable (financial distress) are the same in four models. The results show that distressed Egyptian firms tend to manipulate earnings management using real earnings management (abnormal production costs, abnormal cash flow from operations and abnormal discretionary expenses) rather than accrual earnings management which means that managers of financially distressed firms don't manipulate earnings management using accruals earnings management because accrual earnings management is more likely to be discovered by auditors and investors. And managers of distressed firms have lower accounting flexibility. | ||
| Keywords | ||
| financial distress; accruals earnings management; real earnings management | ||
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