قياس أثر القدرة الإدارية على جودة التقرير المالي و خطر انهيار أسعار الأسهم : دراسة تطبيقية على الشركات المقيدة بالبورصة المصرية

Abstract EN

Purpose: Measuring the impact of managerial ability of executive managers on the quality of financial reporting and its role in reducing stock price crash risk.

Design and Methodology: The current study adopted the content analysis approach to exam the annual reports of a sample of (116) non-financial joint stock companies listed on the Egyptian Stock Exchange during the period (from 2016 to 2018), with a total of (348) views in order to test the study hypotheses that reflect the relation between managerial ability of executive managers and the financial reporting quality indicators such as the accounting conservatism, real earnings management, information asymmetry, Financial reporting timeliness, earnings announcement tone, and the impact of the managerial ability in reducing the stock price crash risk.

In addition, the current study used the multiple regression technique to test the study hypotheses.

Conclusion and Recommendations: The results of the current study research concluded that the managerial ability has a positive effect on the quality of the financial report of the study sample.

Moreover, it has a positive and statistically significant relation with the accounting cons-ervatism, the financial reporting timeliness and the earnings annou-ncement tone.

While it has a negative and statistically significant rela-tion with both the real earnings management and the information as-ymmetry.

Managerial ability also has a negative and statistically sign-ificant effect on reducing stock price crash risk.

Based on the current study results, Egyptian companies should pay more attention to the managerial ability of executive managers (such as accounting literacy, experience, period of work, personal skills, reputation, and comm-unication) because of its positive effect on firm's economic results, establishment of controls and legislation necessary to regulate the chief executive officer job, ownership of firm's shares, reduction of excessive confidence, and to control and prevent management hiding of bad news and to enhance transparency in order to reduce stock price crash risk.

Study Limitations: The results of the current study should be limited to the sample size and methods of measuring the variables applied.

The current study focused on analyzing the impact of the managerial ability of executive manager (excluding this of the financial manager) on the quality of the financial reporting and the stock price crash risk in non-financial listed companies in the Egyptian Stock Exchange market.

Practical Implications: The results of the current study may be of interest to the Board of Directors in the hiring decisions of executive managers, it is also of great interest to stakeholders when assessing m-anagement skills as a potential determinant of the quality of the financial reporting.

The study results can also provide useful information to accounting standard boards and controlling authorities about accounting quality, reduction of stock price crash risk and the management ability to adopt accounting standards.

Originality and Value: This study contributes to accounting literature by attempting to reduce the debate about the relationship between managerial ability (characteristics of managers) and the quality of the financial reporting, which would help in explaining the discrepancy bet-ween the performance of different firms, and also provides additional evidence to explain the role of management ability in reducing future stock prices crash risk in the Egyptian business environment, as an exa-mple for emerging economies.