Analysis of the Impact of Disclosure and Transparency as A Principle of Governance Over Earnings Management “An Applied Study on The Commercial Banking Sector”

Document Type : Original Article

Authors

1 Accounting teacher Higher Institute of Administrative Sciences in Sohag Egypt

2 Business Administration Teacher Higher Institute of Administrative Sciences in Sohag

Abstract

The study aimed to analyze the impact of the transparency and disclosure standard on the practice of earning management in the banking environment. The research problem Focused on the impact of the transparency and disclosure standard measured by, (general risk management, exposure to credit risk, currency and market risk, exposure to liquidity risk, key non-financial statistics, disclosure of community participation, employee information, voluntary disclosure) as the focus of the disclosure transparency index (VD) on earnings management measured by (Modified jones Model) in light of the variables (bank size, bank age, external auditor) as controlling determinants of commercial banks listed on the Egyptian Stock Exchange? This is done by collecting and analyzing the financial statements of all commercial banks listed on the stock exchange (nine commercial banks) for a period of five years during the period starting from 2017 to 2021. The study Showed that the commercial banks listed on the Egyptian Stock Exchange do not practice earning management”, It also should that there is no statistically significant effect of disclosure and transparency as a principle of governance as measured by (general information, bank strategy, corporate governance, accounting policies, financial performance and statistical information). Others, general risk management, exposure to credit risk, currency and market risk, exposure to liquidity risk, key non-financial statistics, disclosure of community participation, employee information, voluntary disclosure) as components for the disclosure transparency index (VD) on earnings management measured by (modified Jones model) in light of the controlling variables (bank size, bank age, external auditor) as determinants of commercial banks listed on the Egyptian Stock Exchange. The study recommended the necessity for activating the rules of banking governance in general, and focusing on the standard of transparency and disclosure in particular.

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