Financial Reporting, Earnings Management, Firm Characteristics


Earnings management has been a great and consistent concern among practitioners and regulators and has received considerable attention in the accounting literature. Several techniques and reasons exist for the practice of earnings management each is based on the management’s objectives. This paper aims to assess the impact of firm characteristics on earnings management of the listed firms in Egypt. It selects the 50 most active firms in the Egyptian stock exchange and the analysis is done using the financial statements from the disclosure book for the period 2007-2011.After excluding banks and insurance companies, for having different disclosure requirements and different corporate governance code, the final count for the firms included in the paper is 60 firms in five years so this leave us with a total of 300 observations. The tests for this research are done using the random effect generalized least square regression model using the Stata program. Findings found that there is a significant positive relationship between firms' financial leverage and earnings management while other variables of the firm characteristics which are firm size, firm age and firms' audit quality have an insignificant relationship with earnings management.

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