أثر العلاقة المشترکة بین إستراتیجیة الأعمال وإستراتیجیة إدارة الأرباح على خطر الإفلاس دراسة تطبیقیة على الشرکات المدرجة بسوق الأسهم السعودی

Abstract

The research aims to study the relationship between the type of business strategy, earnings management strategy and bankruptcy risk. To achieve this goal, the study relied on the concept of both agency theory and signal theory in developing a framework for the impact of the interrelationship between business strategy and earnings management strategy on bankruptcy risk, then applying the framework to the financial statements of companies listed in the Saudi stock market. The research results are based on sample included 105 firms with (420) annual reports over a four-year period (from 2016 to 2019). The research findings can be grouped into three main results. Firstly, the companies listed in the Saudi stock market relied on a real-time strategy to manage their profits. Secondly, there is a positive relationship between involvement of senior management in the practices of real earnings management, for managing the profits of the company that adopts the cost leadership strategy or that adopts the differentiation strategy, and risk of bankruptcy to which it is exposed. Finally, there is a negative relationship between involvement of senior management in the practices of accounting earnings management, for managing the profits of the company that adopts the cost leadership strategy or that adopts the differentiation strategy, and risk of bankruptcy to which it is exposed. This research provides empirical evidence supporting the existence of the effect of the interrelationship between business strategy and earnings management strategy on bankruptcy risk