The effect of adopting international financial reporting standards on earnings management in Iraqi tourism companies: An empirical study

Dr-Ahmed Saad Jari, Dr- Istiqlal Jumaah Wajar, Husam Hasan Hashim
2020 African Journal of Hospitality, Tourism and Leisure  
This study examined the impact of adopting the international financial reporting standards (IFRSs) on the practice of earnings management in the Iraqi tourism sector in order to limit these practices after the Central Tourism Directorate of Iraq directed all the Companies to implement these standards on their financial statements for the year 2016. Ten Companies from the private tourism sector as listed in the Iraq Securities Market for the period 2014-2016 were selected for this study. This
more » ... this study. This study then used the model of Kothari et al, 2005 to determine the optional accruals that are inversely associated with management profits compared the practice of earnings management under the local rules and standards for the years 2014 and 2015, with the adoption of the international financial reporting standards for the years 2016-2017. The study revealed that all the selected Companies practiced earnings management. However, the adoption of the international financial reporting standards for the years 2015-2016 contributed to limit the practice of earnings management and decreased the average optional accruals by 2.7 percent, which is positively reflected by limiting the earnings management practice.
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