الفهرس 
Title: The Effect of Accruals Quality on Financial Constraints and its Impact on Investment Decisions
AbstractOnly 14 pages are availabe for public view
 |  | from | 167 |  |  |
| | | from | 167 | | |
Abstract
The main aim of the current research is to examine whether financially constrained firms would engage in accrual-based earnings management, or in other words, reduce their accruals quality, in order to facilitate their financial constraint problem through raising more external financing, and to make more investment decisions. The research covers a period of five years from 2010-2014, and comprises 69 Egyptian firms listed in the Egyptian Stock Exchange. Secondary data have been collected from the standalone financial statements of the firms. An ordinary least square (OLS) regression is conducted to test the validity of the research hypotheses. The modified Jones model (1995) is used as a measure of accrual-based earnings management, the sum of the change in capital, and the change in short-term and long-term loans is used a measure of external financing, and capital expenditures are used as a measure of investment decisions. The results show that there is a significant positive association between accrual-based earnings management and external financing, and between accrual-based earnings management and investment decisions, which implies that firms use accrual-based earnings management in order to raise more external financing and make more investment decisions. The results also conclude that the effect of both accrual-based earnings management and external financing on investment decisions is significantly positive, which indicates that firms raising more external financing through accrual-based earnings management invest excessively