Master Thesis, College of Administration and Economics, University of Baghdad.
ISSN/ISBN: Not available at this time. DOI: Not available at this time.
Note - this is a foreign language paper: ARA
Abstract: The agency theory appeared as a result of the emergence of corporations, and as a result of the conflict of interest between management and owners and the rest of the stakeholders in the company, and according to the principle of rational choice, who is trying to which each of the parties to maximize the benefits of its own private, the earnings management appeared. It is a known fact that earnings management is conducted by the practices of the company’s management resulting from it choice of the accounting policies for the company, Influenced by its own objectives. There is a common agreement among most researchers that the earnings management techniques are used in order to mislead stockholders and other users of the financial statements. Therefore, we can say that it's a set of activities, tactics and procedures uses by the company's management to which aim at maximizing the management Benefits regardless of its legitimacy by using the flexibility of accounting standards or even ignoring them. The research aims to introduce the concept of earnings management and the motives and methods adopted, and the most prominent factors and ways to reduce them. As well as a statement concept audit quality, and characteristics and dimensions, and the factors affecting it, and its impacts on management practices profits, as well as shed light on the law Benford, and how it is used and the nature of digital of this law, and its role in detecting the earnings management of the listed companies in the Iraqi stock Exchange. The Benford’s law is considered modern control methods in detecting the earnings management in the financial statements of the companies, and it’s Reflections on audit quality. The researcher found a group of the most important conclusions: 1. There exist earnings management practices of the listed companies in the Iraqi stock Exchange Market, which have been discovered using Benford's law. 2. The Earnings management is used to mislead stockholders and other users of financial statements, and hence the aim is to mislead and block the truth, and that involved in within immoral activities. The Earnings management is a set of activities, methods and procedures acted by the company's management, in order to maximize its benefits. 3. It is hard to get rid of the personal bias by the accountants and the practitioners, and this is considered the main reason that enable the management to manipulate the accounting accruals and estimates in the aim of practicing earnings management; and that is resulted from the absence of accounting theory, when reaching to it, the accounting profession can exclude the personal bias of the accountants and the practitioners. 4. Accomplishing the auditors to their work with high quality can reduce the ability of earnings management, where the performance of audit quality is a hindrance to earnings management, and thus, the percentage of earnings management will be lesser in companies that their auditors achieves audit process in high quality. The research concluded a set of recommendations, which are: 1. It is important that the Profession Council set training workshops for auditors; these workshops are devoted to how to use Benford's law in the detection of manipulation and fraud. 2. It is important that the Legislative and professional bodies have to issue laws and regulations which play the role of deterrents for the companies that manage their earnings and be similar to the U.S. Sarbanes-Oxley Act of 2002. 3. The authority regulator of the Iraq stock Exchange has to form a special body in the market to follow the practices, methods and accounting procedures of the listed companies and to specify the ones involved in earnings management, with an aim to reduce such practices. 4. It is important that the Professional Council in Iraq should confirm the necessity that the auditors exercise high-audit quality process to detect the companies that is earnings management.
Bibtex:
@thesis{,
author = {Hakeem Hammood Flayyih},
title = {Using Benford Law in Detecting Earnings Management and its Reflection on the audit quality : In application on a sample of listed companies in the Iraq stock Exchange},
year = {2013},
institution = {University of Baghdad},
}
Reference Type: Thesis
Subject Area(s): Accounting