Financial Architecture, Earnings Management, and Corporate Financial Performance: An Exploratory Study

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Anwar Abbas Al-Hindawi, Muna Hassan Mohammed

Résumé

This article explores the relationships between financial architecture, earnings management, and corporate financial performance of financial institutions in the Iraqi stock market and their architecture's effect on the overall financial results. The sample includes 193 observations for the period between 2010-2020. The analysis indicates a significant relationship between financial architecture and earnings management, and the managers tend to use earnings management techniques to improve the economic image of the firm. The finding also shows a positive relationship between financial architecture and firm performance, and sound financial performance reflects a better financial decision. The study provides a theoretical model for the influence of various aspects of financial architecture, such as capital structure, capital ownership, and corporate governance, on financial architecture. There is a significant disparity between the firm's operating success and financial worth, measured by earnings, in the Iraqi stock exchange and its peer companies.

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