Perceptions of Earnings Management in Libyan Commercial Banks
: An Accountability Perspective

  • Yaser M. B. Barghathi

    Student thesis: Doctoral ThesisDoctor of Philosophy


    This research aims to explore and identify empirically the perceptions of Libyan Commercial Banks’ (LCBs) stakeholders about earnings management and its impact on the quality of financial reporting. The study examines the occurrence of earnings management and the techniques that are used to manage LCBs’ earnings by first investigating the understanding of LCBs’ stakeholders about the term earnings management. The study also examines perceptions of the motivations behind LCBs’ managers being engaged in earnings management, as well as the perceived conditions that enable LCBs’ managers to manage their earnings. Finally the study examines stakeholders’ perceptions about the controls by which earnings management may be mitigated. The results of the study are interpreted through an accountability perspective. The study uses semi-structured interviews and a questionnaire survey with wide groups of stakeholders’ LCBs. The findings of this study reveal a range of views regarding the quality of financial reporting between different stakeholders groups, and also within the individual groups. This finding may refer to a serious problem within the accountability relationship of the LCBs. The results findings also reveal that the term ‘earnings management’ is not understood consistently by different stakeholders in Libya. The findings also suggest the existence of earnings management in LCBs’ financial reporting using various techniques e.g. especially the loan loss provision. The motivations of earnings management practices as revealed by the study findings are consistent with those reported in the literature. Earnings management is perceived as an unethical practice by most of the LCBs’ stakeholders but there are exceptions to this view. Earnings management could be reduced, according to the perceptions of LCBs’ stakeholders, by adopting IFRS, applying better corporate governance, and enhancing the role of the external auditor.
    Date of Award2014
    Original languageEnglish
    SupervisorDavid Collison (Supervisor) & Louise Crawford (Supervisor)


    • Earnings Management
    • Accountability
    • Libya

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