Abstract:
This study has focused on identifying the impact of real earnings management on financial performance of shariah compliant firms in Pakistan. In this study, real earnings management has been considered as independent variable. Whereas, return on assets, return on equity, earnings per share, and price to earnings ratio has been considered as dependent variables. However, this study has finalized shariah compliant firms in Pakistan to testify the relationship between real earnings management and financial performance. Secondary sources of data (annual financial statements) have been used for data collection regarding variables of this study from the period of 2012 - 2017. A sample size of 1350 has been finalized to represent the entire population. Collected data has then been analyzed through statistical instruments such as correlation and regression by using STA TA. Based on the findings, it has been concluded that real earnings management has significant impact on return on assets, return on equity, and price to earnings. Whereas, real earnings management has insignificant impact on earnings per share of shariah compliant firms in Pakistan
