Examining the Moderating Role of Corporate Socio-Cultural Factors on the Relationship Between Managerial Ability and Earnings Management under Conditions of Economic Uncertainty in the Iraq and Oman Stock Exchanges
Keywords:
Managerial ability, earnings management, specific socio-cultural characteristics, economic uncertaintyAbstract
The present study investigates the effect of managerial ability on earnings management in companies listed on the Iraq and Oman Stock Exchanges over the period 2015 to 2023. The statistical population includes 35 Iraqi firms and 33 Omani firms. The results of data analysis indicate that managerial ability has a significant negative effect on both accrual-based and real earnings management; in other words, managers with higher levels of ability are less inclined to manipulate earnings. Furthermore, the findings show that social culture, as a moderating variable, strengthens the relationship between managerial ability and earnings management in both Oman and Iraq. In other words, in societies with particular cultural and social characteristics, managers are increasingly influenced by their social values, beliefs, and expectations when making financial decisions, which can, in turn, affect the manner in which earnings are managed. However, contrary to the positive effects of social culture, the results reveal that economic uncertainty does not have a significant impact on the relationship between managerial ability and earnings management. Specifically, under unstable economic conditions and in the presence of uncertainty, managers rely more heavily on their own capabilities and are less affected by external economic and political conditions. Therefore, it can be concluded that social culture plays an important role in strengthening the relationship between managerial ability and earnings management, whereas economic uncertainty does not exert a meaningful influence on this relationship.
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Copyright (c) 2025 Mustfa Zuhair Fadhil ALhajj Yousif (Author); Mohsen Rahimi Dastjerdi; Ameer Saheb Shaker, Hamzeh Mohammadi Khoshouei (Author)
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