Impact of Accounting Standards on Earnings Management in Selected Middle-East Countries
Keywords:
Earnings management, earnings quality, accounting standards.Abstract
The Middle East accounting standards were reformed to improve the quality of accounting information. The Middle-East countries, to a large extent, have welcomed the International Accounting Standards. The current research addresses the question whether the adoption of International Financial Reporting Standards (IFRS) is associated with a lower level and magnitude of earnings management. This study uses the level of earnings management as a proxy for earnings quality, and therefore the quality of financial statements. In this way, earnings management has been quantified by discretionary accruals. Francis et al., (2008) model and Modified Jones model (1995) have been used to determine the level and magnitude of earnings management in selected countries. This research employed two-step Generalized Method of Moments (GMM) estimator to investigate the effect of accounting standards reform on earnings, different unbalanced panels were used based on a sample of non
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