The Impact of Disclosure of the Risks of Volatility in a Foreign Exchange Rates on the Earnings Quality : An Empirical Study on the Sector of Pharmaceutical Companies Listed in The Egyptian Stock Exchange During the Period of 2013-2018

Document Type : Original Article

Authors

1 Professor of Financial Accounting Faculty of Commerce al-manoufia University Egypt

2 Accounting department Faculty of Commerce ِِAl-manoufia University Egypt

3 Accounting department Faculty of Commerce al-manoufia University Egypt

Abstract

This research addresses the measurement and analysis of the impact of disclosure of the risks of foreign exchange rates volatility on the earnings quality, and that as part of applied study includes eleven companies registered on the Egyptian Stock Exchange which follow the pharmaceutical industry, two methods were adopted in this study, the first one depends on deductive from endoscopic study, the second one depend on inductive from applied study, applied study include two types of independent and dependent variables, Independent variables is the risks of foreign exchange rates volatility which is expressed quantitatively by two indicators ,the first one The first is the relative weight of the exchange rate earnings or losses, the second one is The rate of fluctuations in the earnings or loss of exchange rates, While the dependent variable expresses the quality of earnings which was quantified through a model that depends on the quality of accrual accounting, The main aim of this research is Formulating a model  represent the impact of exchange rate risk on the quality of Earnings, The formulation of the model depended on Regression analysis method, The main findings of the study are the absence of significant relationship between the disclosure of the risks of foreign exchange rates volatility and earnings quality. The researcher recommends more detailed disclosure whether in financial statements or in footnotes. 

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