List of Articles Aspects of Earnings Management

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  1 - Analysis of agency conflict with emphasis on aspects of earnings management, audit quality and cost of equity; Game theory approach
  Zahra Moghaddam Hamzeh Didar Kiumars Shahbazi Ali Ebadian
  10.30495/eco.2024.1993373.2776
  The purpose of this article is to describe and explain the strategic behavior of managers and shareholders in the interactive-conflict environment of joint-stock firms using the tools of game theory and in the form of signaling games. In such a way that first, taking in More

  The purpose of this article is to describe and explain the strategic behavior of managers and shareholders in the interactive-conflict environment of joint-stock firms using the tools of game theory and in the form of signaling games. In such a way that first, taking into account the level of quality of internal controls, the manager acts on (deceptive and informative earning management) and then the shareholder with strategies (high capital cost, low capital cost) and also (high-quality audit services, low-quality audit services) reacts to it. The findings of the research, theoretically, the necessary conditions for establishing balance in the strategies (deceptive earning management, high capital cost), (deceptive earning management, high-quality audit services) in the environment of weak internal controls. In addition, it shows the condition of establishing equilibrium in the strategies (informative earning management, low capital cost), (informative earning management, low-quality audit services) in the environment of strong internal controls.. Manuscript profile
• Open Access Article
  • Abstract Page
  • Full-Text
  
  2 - Analysis of agency conflict with emphasis on aspects of earnings management, audit quality, and cost of equity: Game theory approach
  Zahra  Moghadam Hamzeh Didar Kiumars Shahbazi Ali Ebadian
  This article aims to describe and explain the strategic behavior of managers and shareholders in the interactive conflict environment of joint-stock firms using the tools of game theory, specifically through signaling games. Managers, considering the quality of internal More

  This article aims to describe and explain the strategic behavior of managers and shareholders in the interactive conflict environment of joint-stock firms using the tools of game theory, specifically through signaling games. Managers, considering the quality of internal controls, engage in both deceptive and informative earnings management strategies. Shareholders then respond with strategies involving high or low capital costs and opt for either high or low-quality audit services. The findings of the research outline the theoretical conditions necessary for establishing balance in strategies such as deceptive earnings management with high capital costs and deceptive earnings management with high-quality audit services in environments characterized by weak internal controls. Additionally, it highlights the conditions required to establish equilibrium in strategies like informative earnings management with low capital costs and informative earnings management with low-quality audit services within environments boasting strong internal controls. Manuscript profile