Earnings management and audit quality at Damascus securities exchange: Does managerial ownership matter?

  • 10 Jul 2021
  • Recently published Research - Business


Zukaa Mardnly, Zinab Badran, Sulaiman Mouselli

Published in

Journal of Financial Reporting and Accounting, EarlyCite (ahead-of-print), June 2021.


The purpose of this study is to examine the individual and combined effect of managerial ownership and external audit quality, as two control mechanisms, on earnings management. This study applies ordinary least squares estimates on fixed-time effects panel regression model to test the impact of the investigated variables on earnings management for the whole population of banks and insurance companies listed at Damascus Securities Exchange (DSE) during the period from 2011 to 2018. The empirical evidence suggests a negative non-linear relationship between managerial ownership (as proxied by board of directors’ ownership) on earnings management. However, neither audit quality nor the simultaneous effect of the managerial ownership and audit quality (Big 4) affects earnings management.

Keywords: Earnings Management, Ownership Structure, Managerial ownership, Damascus Securities Exchange, External Audit Quality.

Link to Abstract