Abstract

MEASURING THE REAL EARNINGS MANAGEMENT IN UNDER OF THE AGENCY CONFLICT BETWEEN CONTROLLING AND NON-CONTROLLING SHAREHOLDERS: EVIDENCES FROM IRAQ

Maytham Badr Baiewe, Prof. BushraNajm Abdallah Al-Mashhadani

Volume: 10 Issue: 3 2020

Abstract:

The research aimed to measure the Real Earnings Management and the extent of its impact on the rights of noncontrolling shareholders in light of the agency conflict between controlling and non-controlling shareholders for a sample of economic units listed on the Iraq Stock Exchange, approving financial statements issued during a 5-year period that extends from 2010-2014, the research relied on a set of statistical measures to measure the Real Earnings Management, and the results show that the economic units of the research sample exercise the Real Earnings Management through manipulation of sales and through discretionary expenses indicating the reflection of such practices on violating the rights of non-controlling shareholders in the economic units of the research sample as well as the low level of earnings quality in the years covered by the research. The research also recommended, in light of the results and conclusions, the need to formulate mechanisms for corporate governance and strict application of them that would preserve the rights of non-controlling shareholders by controlling and limiting the opportunistic behavior of the controlling shareholder by reducing real earnings management cases through sales and through discretionary expenses which contributes to improving the quality ofearnings.

DOI: http://doi.org/10.37648/ijrssh.v10i03.003

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