The Role of Auditing in Detecting Practices of earnings Management and Reporting at Iraqi Stock Exchange
Previous studies in the field of profit management prove two main approaches for such a management. CEOsare able to manage benefits through accruals as well as actual activities manipulation (Hilly et al., 1999). Profit management literature mostly insist on profit management based on accruals....
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| Main Authors: | , |
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| Format: | Article |
| Language: | Arabic |
| Published: |
University of Kufa, Faculty of Administration and Economics
2022-01-01
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| Series: | مجلة الغري للعلوم الاقتصادية والادارية |
| Online Access: | https://journal.uokufa.edu.iq/index.php/ghjec/article/view/3248 |
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| Summary: | Previous studies in the field of profit management prove two main
approaches for such a management. CEOsare able to manage benefits
through accruals as well as actual activities manipulation (Hilly et al.,
1999). Profit management literature mostly insist on profit management
based on accruals. However, quantitative studies regarding actual profit
management had been carried out. Actual profit management is
accompanied by change in timing or the structure of actual activities.
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Therefore, the researchers of actual profit management look for detecting
abnormal levels of entity’s activities (Legni et al., 2009).
CEOs take advantage of two management methods based on accruals
and real profit management to manipulate benefit. In the first approach,
management is done through manipulating accruals to accounting
numbers in accordance with its required goals. In this method, the CEO
manages the profit through accelerating income recognition as well as
delay in recognition of expenses to present a better performance in the
current period. However, the CEO turns to the actual profit management
through adopting some operational decisions, i.e. manipulating real
activities, reaches the required benefit. Studies such as Hilly and Wellen
(1999), Fadenburgh and Tiroul (1995), Dichou and Skinner (2000) and
Roichodury (2006) point to approaches such as sales through discount,
changes in shipping table, reduction in discretionary spending, for
instance expenses of research and development, as well as overproduction
as management methods. |
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| ISSN: | 3006-1911 3006-192X |