Earning Management

Topics: Generally Accepted Accounting Principles, Revenue, Income / Pages: 17 (4172 words) / Published: Dec 3rd, 2010
Does the Commercial Banking Industry of UAE Practice Earnings Management

Dr. Mohammed Obeidat

Introduction
It is the right of external users of accounting information to be provided with more adequate information to protect their interests. Many questionable issues concerning the term of earnings management are still available. Auditors, accountants, financial analysts, and other concerned parties may hold the responsibility of detecting external users from the practices of earnings management. Many questionable issues are still available regarding the term of earnings management. Some people may have no enough idea about what practices are classified under earnings management, and what practices can not be classified under this term. Users of accounting information are different but few of them have the ability to detect the practices of earnings management. Because there are different methods of practicing earnings management, detecting the practices of earnings management is one of the difficult issues. The common practice of earnings management by firms and the negative effects of these practices on external users of financial accounting information justify the investigation of this issue. Many users may lose some of their wealth as a result of practicing this phenomenon. Many financial crises appear in our world from time to time, and some reasons of these crises are related to incorrect announced financial information. The problem of the current study will be simpler, if it is presented through the following question: How investors can detect the practices of earnings management, in order to have the ability to protect themselves from the negative effects of these practices? The answer to this question may seem more difficult, so the current study present an example from the Commercial Banking Industry of the United Arab Emirates (UAE). Studying the phenomena of practicing earnings management is important, because this will highlight

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