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EISSN: 2313-3724, Print ISSN:2313-626X

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 Volume 6, Issue 6 (June 2019), Pages: 103-116


 Original Research Paper

 Title: Role of earnings management in determining firm value: An emerging economy perspective

 Author(s): Asad Abbas *, Usman Ayub


 Management Sciences Department, COMSATS University, Islamabad, Pakistan

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 * Corresponding Author. 

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Resource allocation decisions by investors are made on the basis of information provided by firm management. The reports providing information are prepared with the help of international financial reporting standards (IFRS) which provide a great deal of discretion to the management. Management, on the basis of this discretion, manipulates the financial information particularly earnings of firm termed as earnings management which has important implications for firm future. This earnings management can be accruals based and real activities based. This earnings management if beneficial for the firm is efficient and if detrimental is opportunistic. The current study investigates the behavior of earnings management for Pakistani non-financial listed firms for the period of 15 years for 2003-2017 and finds a positive relation between aspects of real and accrual earnings management and firm value variables. However, it appeared to be opportunistic for financially distressed firms and efficient for non-distressed firms when the sample was divided into four categories. Impact of accrual earnings management was more pronounced for Pakistani firms as compared to real earnings manipulation. 

 © 2019 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (

 Keywords: Real earnings management, Accrual earnings management, Firm value, Emerging economy, Distressed firms

 Article History: Received 3 February 2019, Received in revised form 20 April 2019, Accepted 21 April 2019


No Acknowledgement.

 Compliance with ethical standards

 Conflict of interest:  The authors declare that they have no conflict of interest.


 Abbas A and  Ayub U (2019). Role of earnings management in determining firm value: An emerging economy perspective. International Journal of Advanced and Applied Sciences, 6(6): 103-116

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