The effect of real earnings management on the firm value :An applied study on a sample of industrial companies listed in the Iraqi Stock Exchange for the period (2011-2018)

Abstract

The research aims to show the extent of the impact of managing real profits on the company's value in the Iraqi environment for the period from (2011-2018). On a sample of (12) Iraqi industrial companies. The real profit management was measured by the (Roy Chowdhury, 2006) model, while the company's value was measured by the Tobin's Q formula. Where investors build their investment decisions based on the net profit, and from this standpoint, company managers resort to manipulating profits in order to mislead investors and then influence their investment decisions. The study reached a set of conclusions, the most important of which is the existence of a positive and significant effect of managing real profits on the company's value. As for the recommendations, the most important of them are that company managers, before they get involved in managing for profits, should think about its results, especially the real ones. Although it has a positive impact on the value of the company in the short term. However, it has a very negative impact on the value of the company in the future. Thus, corporate directors and external auditors were exposed to the judiciary and the matter.