The earnings management and its impact on investment decision making in capital assets

Abstract

Given that the conducted studies about earnings management have dealt with the effect of earnings management on investment decisions made by enterprises so the current article is mainly intended to review of the studies regarding earnings management as well as quality of the impact by earnings management on corporative decision making for investment. In this essay, investment decision making means those decisions, which are related to investment in corporative capital assets. The results of the conducted studies indicate that earnings management may affect on efficiency of investment in capital assets and this leads to making inefficient and inappropriate decisions.