The effect of firm type on the relationship between accounting quality and trade credit in listed firms
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Leqaa Taha Mouhmmd, Mohammed Alwan Rahima 
, Abdulkareem Mahmood Mohammed, Hussein Falah Hasan, Ali Saad Alwan, Hussein Kadhim Sharaf
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
In this study, it is evaluated how different types of organizations influence the connection between accounting quality and trade credit in Iraqi public companies. Trade credit, defined as accounts payable as a percentage of total assets, is the dependent variable of this study. Accounting quality is the independent variable, and it is measured in three ways: the ability to sustain profits, the ability to predict profits, and the ability to manage real earnings (Arora & Singh, 2021). The sample size is 35 different companies from the years 2011–2016. When we look at this time frame, we see a financial crisis between 2011 and 2013 (when ISIS invaded Iraq) and a period after the crisis, from 2014 to 2016, where things began to stabilize again. To test our assumptions, we employ panel data in Stata 14. According to the findings, firm type has no bearing on the connection between firm sustainability and trade credit, but it does moderate the connection between profit predictability and trade credit. Finally, firm type has a positive and statistically significant bearing on the connection between real earnings management and trade credit.
Keywords: Accounting Quality, Trade Credit, Profit Sustainability, Profit Predictability, Earnings Management, Firm Type
Authors’ individual contribution: Conceptualization — L.T.M. and H.F.H.; Methodology — M.A.R.; Formal Analysis — H.K.S.; Investigation — A.M.M.; Data Curation — A.S.A.; Writing — Original Draft — H.K.S.; Writing — Review & Editing — H.F.H. and A.S.A.; Visualization — M.A.R.; Supervision — H.K.S.; Project Administration — H.F.H.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: M1, M2, G4
Received: 08.06.2022
Accepted: 24.04.2023
Published online: 26.04.2023
How to cite this paper: Mouhmmd, L. T., Rahima, M. A., Mohammed, A. M., Hasan, H. F., Alwan, A. S., & Sharaf, H. K. (2023). The effect of firm type on the relationship between accounting quality and trade credit in listed firms. Corporate & Business Strategy Review, 4(2), 175–183. https://doi.org/10.22495/cbsrv4i2art16
