Özet:

Besides, the corporate level governance factors and country level governance factors there is another crucial factor that affect the earnings manipulation practices, is country level Financial Development. Financial development would likely act to discipline managers, thereby minimizing their engagement in EM, therefore an effective financial development system helps to reduce the EM practices. Hence the main purpose of this research work is to investigate the impact of Financial development on accruals based earnings management by using panel data analysis taking sample of 257 non-financial firms listed in Pakistan stock exchange for the period of 2012 to 2019 through Fixed effect model.The results disclose that the financial development system of Pakistan negatively and significantly influence the EM activities of registered firm’s in Pakistan stock exchange. Hence, conclude that the strong financial system is effectively restrain the EM activities.The overall results are consistent with earlier literature that the advance FD enhance the controlling and analyzing of accounting informationby reducing the interference of management in the procedure of accounting accruals.

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