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Earnings management in Libyan commercial banks: perceptions of stakeholders.

Barghathi, Yasser; Collison, David; Crawford, Louise

Authors

Yasser Barghathi

David Collison

Louise Crawford

Abstract

The issue of earnings management has continued to be problematic in the financial reporting context. It has proved to be an important topic that concerns a wide range of stakeholders, including regulators, investors and preparers. The objective of this paper is to examine the perceptions of different stakeholders with regard to the financial reporting quality of Libyan Commercial Banks (LCBs) by addressing the issue of earnings management. The paper adopts a qualitative approach in order to investigate the topic of earnings management. It considers motives for, and techniques of, earnings management as well as the role and potential role for accounting standards and improved corporate governance in addressing the issue. The paper reports on 28 semi-structured interviews with different stakeholders of LCBs. It is found that financial reporting quality is perceived to be impaired as a result of earnings management. It also provides prima facie evidence of some fraudulent activity in the management of earnings. IFRS/IAS as well as a sound corporate governance system are perceived to have an important potential role in improving financial reporting quality. Some confusion and ambiguity in the understanding of the term earnings management was also identified.

Journal Article Type Article
Publication Date Apr 30, 2017
Journal International journal of accounting, auditing and performance evaluation
Print ISSN 1740-8008
Electronic ISSN 1740-8016
Publisher Inderscience
Peer Reviewed Peer Reviewed
Volume 13
Issue 2
Pages 123-149
Institution Citation BARGHATHI, Y., COLLISON, D. and CRAWFORD, L. 2017. Earnings management in Libyan commercial banks: perceptions of stakeholders. International journal of accounting, auditing and performance evaluation [online], 13(2), pages 123-149. Available from: https://doi.org/10.1504/IJAAPE.2017.10003434
DOI https://doi.org/10.1504/IJAAPE.2017.10003434
Keywords Financial reporting quality; Earnings management; Qualitative; IFRS; Corporate governance; Perceptions

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