Quality of financial reports and earnings management practices

Abstract

The research aims to demonstrate the quality of financial reports and earnings management practices in the investment sector companies, and the quality of financial reports was measured based on the data of the annual financial reports for a sample of Iraqi companies listed in the Iraq Stock Exchange for the years 2011_2020, including four companies in the (investment sector), through The use of the modified Jones model 2005 allows the researcher to measure (the quality of financial reports) as the annual reports of each company are observed separately using the modified Jones equation 2005, and the researcher reached several results, the most prominent of which is the quality of financial reports contributes to improving investment efficiency Reducing information asymmetry and investment risks, as the quality of financial reports is a tool for discovering profit management practices, and thus identifying and controlling companies that do so, which contributes to directing investors to invest in the most efficient and effective companies that achieve gains, thus contributing to the protection of stakeholders in opportunistic practices Earnings management and thus improve investment decisions and efficiency in allocating resources between companies and increase k The efficiency of the money market, and the reduction of financial collapses. The researcher recommended the need to spread awareness among investment sector companies of the concept of profit management and the means that companies can use to manage their profits to ensure improving the quality of financial reports.