The Impact of Earning Management Practices through Classification Shifting of Cash Flow Statement Items on Analyst Forecasts Accuracy with an Empirical Study on Egyptian Corporation

This study aims to explore the nature of the relationship between earnings management practices through classification shifting of cash flow items in the cash flows statement on the Analyst Forecasts Accuracy using an Empirical Study on a sample of Egyptian Corporations listed on the Egyptian Stock Exchange (21 companies) during the period from 2013 To 2021 with a total of (189) observations. 
The study relied on estimating the unexpected operational cash flows (the independent variable) as Surrogate Measure for classification shifting in cash flow statement items on the model proposed by (Dechow et al., 1998), which was used by (Lee, 2012; Nagar and Sen, 2014). To measure Analyst Forecasts Accuracy, the researcher relied on the model proposed by (Lang and Lundholm, 1996), and by using multiple regression analysis on three levels, which are basic, additional, and sensitivity analysis. The study concluded that there is a direct and positive significant correlation between unexpected cash flows from operating activities, and cash flows from each of the financing activities and investment activities, and this represents an indication that the Egyptian Corporations listed on the Egyptian Stock Exchange practice classification shifting through statement of cash flows. There is also negative and significant correlation between unexpected cash flows and analyst forecasts accuracy. Also, there is a direct and positive significant correlation between the number of financial analysts who follow the company and analyst forecasts accuracy. Finally, financially distressed companies are more likely to engage in classification shifting by managing the cash flow statement items.
This study has implications for the Egyptian business environment, as it provides evidence about the analyst forecasts accuracy and what drives the motives of company managers towards classification shifting of cash flow statement items and thus the quality of financial reports. and providing results for regulatory and supervisory authorities in the field of disclosure quality to take steps Towards considering or amending accounting standards related to presenting financial reports.