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Earnings management in Libyan commercial banks: Perceptions of stakeholders

Lookup NU author(s): Professor Louise CrawfordORCiD


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Copyright © 2017 Inderscience Enterprises Ltd. 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 is 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.

Publication metadata

Author(s): Barghathi Y, Collison D, Crawford L

Publication type: Article

Publication status: Published

Journal: International Journal of Accounting, Auditing and Performance Evaluation

Year: 2017

Volume: 13

Issue: 2

Pages: 123-149

Online publication date: 02/03/2017

Acceptance date: 02/04/2016

ISSN (print): 1740-8008

ISSN (electronic): 1740-8016

Publisher: Inderscience Enterprises Ltd.


DOI: 10.1504/IJAAPE.2017.083025


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