The relationship between Corporate Diversification Strategy and Real and Artificial Earning Management

Corporate Diversification of the corporate form of business strategy that many managers are used to improve of their performance. Based on agency theory, management has more information compared with other shareholders and may make decisions that are not in line with the interests of shareholders. Managers often in order to mislead shareholders is earning manage about the corporate actual economic performance. One of the important factors that affect earning management, can Corporate Diversification Strategy. Therefore the aim of this research is to investigation the relationship between Corporate Diversification Strategy and Real and Artificial Earning Management. In this research, according Imen Khanchel (2015), to measure Corporate Diversification Strategy is used from two Business and Geographical Diversification index based on Apostu Model (2010). The statistical population included 124 companies over the period 2009 to 2013, but also some of the variables used to measure the financial years 2005 and 2014. The results show that there is not relationship between Business Diversification Strategy and Artificial Earning Management and there is negative and significant relationship between Geographical Diversification Strategy and Artificial Earning Management. Also, there is not relationship between Business Diversification Strategy and Real Earning Management in this research.