The effect of free cash flow on earnings management: An Applied Study on A Sample of Companies Listed on The Iraqi Stock Market

Abstract

The study aimed to determine the relationship between free cash flow, and earnings management. The study examined a sample of (15) companies listed on the Iraqi Stock Exchange for the banking sector during the period extending from (2012-2021). The study was based on the use of the free cash flow measurement model (Jutami et al., 2011). As for measuring earnings management through... The model (Kothari et al., 2005) to measure the quality of accruals, and the study relied on the applied practical test of the relationships deduced in the theoretical side of the current study. We relied on actual data collected from the reality of the financial statements of the Iraqi banks sample of the study, to reach the extent of the impact of the flow Free cash in profit management in the banks of the study sample, and two statistical analysis programs were used, namely (SPSS). Upon examination, the study concluded that there is a positive and significant effect of the level of free cash flow on earnings management.