Abstract

Objectives: This current study aims to find out the extent to which Saudi joint stock companies practice earnings management behavior in their financial reports, and to know the impact of some company characteristics such as company size, age, type of activity, management efficiency, and audit office size on the practice of earnings management. Methods: The descriptive analytical approach was employed, the study was applied to a sample of 89 joint stock companies whose shares were traded in the Saudi Capital Market (Tadawul), during the period from 2017 to 2019. Results: The results confirmed the existence of positive earnings management practices in the financial reports of Saudi joint stock companies. The results concluded that there is no relationship between the company size, age, and activity on the degree of earnings management practice. Conclusions: The study recommended several suggestions, the most important of which is the need to strengthen the ethical dimension of the accounting and auditing profession by organizing training courses and seminars for accountants in the Saudi business environment, and emphasizing the importance of adhering to professional ethics in the accounting practice field.