Taking the developing Egyptian market as its focal point, the aim of this research is to contribute to the earnings management literature. Due to the limited data available for the Egyptian market, this research examines earnings management based on the entire operating performance of companies. In particular, the question of whether ineffectively performing Egyp-tian companies engage in upward earnings management by devising and applying income-increasing policies was investigated. For the purpose of testing for income-increasing accruals, we examine whether discretionary accruals are greater for ineffectively performing firms than for effectively performing firms. The results show that ineffectively performing Egyptian companies are characterized by positive and considerably greater discretionary accruals when comparatively examined against effectively performing companies. A reasonable interpretation of these results is that ineffectively performing companies engage in earnings management practices, with the most likely mechanism being an opportunistic increase in their reported earnings. Overall, the findings of this study show that operating performance is a critical determinant of earnings management. In terms of the implications of these findings, it is necessary for officials within the Egyptian government to enhance the country’s corporate govern-ance processes, especially in view of the limitations surrounding law enforcement and investor safeguards.

This research was conducted for assessing the predictive ability of future cash flows from operating activities by using accounting earnings and cash flows information in the past. Data were collected from the firms listed on Ho Chi Minh Stock Exchange (HOSE) from 2009 to 2018, including the sample of 242 non-financial listed companies. Three statistical methods approaches were employed to address econometric issues and to improve the accuracy of the regression coefficients based on Ordinary Least Squares (OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). The findings showed that earnings and cash flows and aggregated accruals had remarkable ability to forecast future cash flows and the model of operating cash flows combined with aggregated accruals had the most effective prediction ability for companies listed on Ho Chi Minh Stock Exchange.