Real Earnings Management and The Cost Of Ownership: The Case Of Iraq

Abstract

The paper seeks to quantify the impact of managing real profits on the price of property rights; the deductive method was used to present the theoretical side of the research. On the practical side, data from the financial statements of a sample of Iraqi companies listed on the Iraq Stock Exchange for the period (2011-2020) were utilized, as the study sample consisted of ten companies. The study measured real profit management through "manipulation" in sales, production, and optional expenses, while the cost of ownership was measured by the capital asset pricing model, and the program ((SPSS25) was used for the analysis and knowledge of the simple linear correlation, the t test, the simple linear regression, the variance, and the f test.After evaluating the research hypothesis, it was determined that earnings management with actual activities has a statistically significant impact on the cost of ownership. Among the most important recommendations of the study is that investors should consider the company's strategy and its suitability to their needs when making investment decisions and determining the required rate of return. In taking risks against the desired level of return, as well as evaluating the level of actual profit management practices and their applicability to the company's circumstances.