تقييم أثر الضائقة المالية للشركات على جودة التقارير المالية وقابليتها للمقارنة: دليل تطبيقي من البيئة المصرية

Abstract

This study examines the impact of financial distress on the quality and comparability of financial statements. Eighty-three non-financial firms from 7 sectors listed on the Egyptian Stock Exchange were sampled, with 415 balanced observations covering 2018 to 2022. Financial distress is computed based on the model of Altman (1968). Earnings management indicators of Jones (1991) and Dechow et al. (1995) are used as an inverse proxy for the financial reporting quality. The study followed the experimental measurement established by De Franco et al. (2011) to measure the comparability of financial statements. Multivariate linear regression of panel data is analyzed using Feasible Generalized Least Squares (FGLS) and Fixed Effects Model. The findings demonstrate a significant negative impact of financial distress on financial reporting quality. Such findings indicate that distressed firms with financial crises manipulate accounting earnings and reduce the quality of their financial reports, as financial distress risks encourage managers to engage in aggressive accounting approaches to maximize their benefits. Likewise, the results show a significant negative impact of financial distress on financial statement comparability. The study reveals that distressed firms tend to produce financial statements that compare poorly with their peers, as financial distress pressures strongly affect managerial decision-making processes related to financial reporting. Based on the findings, the study provides empirical evidence that manipulation and heterogeneous disclosure of financial statements is a potential economic response to financial distress and may ultimately lead to a decline in the quality and comparability of financial reports.This study contributes to the existing literature, providing complementary findings to research on investor protection. Its findings are important to academics, managers, investors, bankers, rating agencies, and owners of distressed institutions.