The Relationship between Ownership Structure and Earning Management Practice: The Conceptual Framework
DOI:
https://doi.org/10.53840/ijiefer16Keywords:
Corporate Governance, Ownership Structure, Earnings Management, Political Instability, PalestineAbstract
Allah forbade financial fraud in verse 29 in Al-Nisa’a Surah. This verse considered as evidence to constrain managers in engaging in earnings management (EM) and a command to mitigate the conflict between owners themselves to prevent EM. The objective of this paper is to investigate the role of political instability on the relationship between ownership structure (OS) and EM in the Palestinian context. By revering the prior literatures, the political circumstances influence the formation of OS. Agency theory and political theory were used to develop the hypotheses. Accordingly, it can be observed that OS and EM practices affected by political instability particularly in Palestine. Unlike most of the previous literatures on the developing countries, this study uses the political instability as a moderating variable to investigate the relationship between OS and EM in Palestine which is characterized by high level of political instability.
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Copyright (c) 2019 Ali Hassan Ibraheem Aljadba, Norhaziah Nawai, Nur Hidayah Laili
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