Profit Management in Private Banks and Its Impact on Market Value an Applied Research on Private Banks Listed in the Iraq Stock Exchange.

  • Home/
  • Uncategorized/
  • Profit Management in Private Banks and Its Impact on Market Value an Applied Research on Private Banks Listed in the Iraq Stock Exchange.

Profit Management in Private Banks and Its Impact on Market Value an Applied Research on Private Banks Listed in the Iraq Stock Exchange.

Abbas Fadel Ali

Al-Furat Al-Awsat Technical University / Technical Administrative College / Kufa

Abstract

The main objective of this research is to determine the effect of profits management in the market value of shares of Iraqi private banks, which are listed in the Iraqi Stock Exchange, via using some selected indicators that denote the practices of profits management. To achieve this objective, the research relied on (Miller, 2009) model to determine the practices of profits management in three listed banking firms (Credit Bank of Iraq, Babylon Bank, and Al-Mansour Bank). The research adopted the inductive and deductive methodologies to verify the hypothesis, relying on the annual financial reports of the sample banks and Iraqi Stock Exchange, to find the effect of profits management in the market value of shares of the studied banks. The most important conclusions of the research are:1.Adopting the profits management policy by the economic unit have an impact on the prices of traded shares in Iraqi Stock Exchange. This was proved through analysis, which showed the effect of profits management on the market value of shares .2.The profits management policy adopted by the economic units have influenced the investment decisions taken by those units. This influence emerged as a result to the price change of the shares due to profits management policy.3.Accordingly, the research also produced some recommendations as below: Commitment to the due dates of submitting the annual report to the Iraqi Stock Exchange, considering their impact in the market value of shares , securities, and their impact on user decisions. Approval the market value as an indicator to the total performance of the economic unit management. External influences should be taken into account like profits management policy, volume of trading and current political situation. Keywords: Earnings Management, Income Smoothing, Market Value, Private Banks.

DOI:10.52113/6/2019-9-2/40-56

Categories: Uncategorized