Abstract

Knowing how costs are spent in relation to changes in activity level is important information for managers to make decisions about planning and budgeting, product pricing, head-to-head, and more. According to the theories expressed about cost behaviour, cost changes depend only on the amount of change in the level of activity and these changes occur symmetrically. Evidence obtained from recent research has challenged this theory and the issue of cost constancy that it proves the meaning of unequal response to costs and variables in the firm's activities. One of the basic assumptions of management accounting is that changes in costs are proportional to the increase and decrease in activity. The purpose of this study is to study the impact of earnings management and its interaction with the independence of the board of directors on the stability of operating costs in the Iraqi stock exchange companies. Because of the importance of examining the behavior of costs for the future planning of companies, and the main purpose of this study is to answer these questions: Are administrative costs, overhead costs and sales costs in addition to the cost of goods sold fixed? Is there an important relationship between the independence of the board of directors and the stability of operating costs? How does it affect their operations? The results of this survey, based on information from companies listed on the Iraqi Stock Exchange, over a period of six years from 2011 to 2016. It appears that the independence of the board of directors and profit management has led to a decrease in the stability of operating costs, in the face of the compensation of managing increased profits, and other overhead costs and costs Sales other than advertising and research and development costs. We also sought to examine earnings management, the independence of the board of directors, and their interactive effects on the stability of operating costs in companies listed on the Iraqi Stock Exchange for use by private equity investors. Excel and Eviews programs were also used to analyze data and extract research results.