الفهرس 
General Framework of the ResearchOnly 14 pages are availabe for public view
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Abstract
This chapter demonstrates the summary of the research, its conclusions and the suggested recommendations.
5.1 Summary
Previous studies declared that the allocation of free cash flow seems to be a main agency problem between principles and agents. Managers perhaps invest free cash flow in projects with low or negative present value rather than dividends distribution in order to obtain short term personal interest. To obfuscate this effect, managers may utilize discretionary accruals in order to manipulate earnings.
Managerial ownership is a crucial mechanism for mitigating the conflict of interest between shareholders and managers but, sometimes it may be a cause of the agency conflicts. When managers do not own significant ownership in the firm, they can make decisions which may not be in the favor of shareholders and this leads to increase the agency conflicts. On the other hand, when managers own significant ownership in the firm, this may shield them from improper decisions which are made only for their own interest.
This research aims to scrutinize the relationship between free cash flow and earnings management. Furthermore, it examines the effect of ownership structure characteristics mainly managerial ownership and institutional ownership as moderator variables on the relationship between free cash flow and earnings management.
The applied study is implemented on the basic resources and the industrial sectors only which are listed on the Egyptian Stock Exchange for the period (2011-2020).The sample consists of 8 companies for the period of 10 years so, this resulted in 80 observations where their data are analyzed using the statistical package for the social sciences (SPSS V.26) and the multiple linear regression model is applied to test the hypotheses.
5.2 Conclusions
The findings of the research can be summarized as follows:
1- There is a strong significant negative relationship between free cash flow and earnings management as the SPSS output table reflects a Pearson correlation coefficient of -0.809 with a corresponding p-value of 0.000 which is lower than the significance level 5% (p-value= 0.000 < α=0.05). Therefore, the first null hypothesis is rejected.
This means that as the free cash flow available within the firm increase, the earnings management decrease. The more the firm has free cash flow, the wealthier it is because it has cash for growth, repaying debts, buying back stocks and distributing dividends. So, firms with high free cash flow are not inclined to manipulate earnings.
2- The managerial ownership and its interaction with free cash flow do not have a significant effect on the relationship between free cash flow and earnings management as the p-value of their T-test exceed the significance level 5% (p–value = 0.985, 0.296 > α = 0.05). Thus, the second null hypothesis is accepted.
3- The institutional ownership and its interaction with free cash flow do not have a significant effect on the relationship between free cash flow and earnings management as the p-value of their T-test exceed the significance level 5% (p–value= 0.886, 0.575> α = 0.05).Therefore, the third null hypothesis is accepted.
5.3 Recommendations:
As previously mentioned, the standards did not provide a uniform definition and measurement for free cash flow and did not require firms for its disclosure. Therefore, there is no consensus in computing free cash flow. The various measurements of free cash flow among firms may lead to the managers’ opportunistic behavior which may result in earnings manipulation.
Based on the results of this research, here are some recommendations:
1. A uniform definition of free cash flow and the method of its measurement should be provided by standards.
2. Companies should be required to disclose the free cash flow and its measurement in the accompanying notes of the financial statements.
3. It is important for investors to focus on free cash flow before making decisions.
4. Increasing the percentage of managerial ownership may mitigate the agency conflicts as the managers’ interests will be in line with the shareholders’ interests.
5. Raising the percentage of institutional ownership discourage managers to use free cash flow inappropriately and avoid wasteful expenditures.
6. Increasing dividends leads to decrease the free cash flow which could be used according to the managers’ discretion, thus reducing the potential of misusage of free cash flow that may increase the agency conflicts between principles and agents.
7. Debts can be an alternative method to reduce the free cash flow which may be used inefficiently by managers. High leverage restrains free cash flow through interests and principal payments.
5.4 Suggestions for Future Researches:
1) Measuring the Relationship between Free Cash Flow and Earnings Management in Food, Beverages and Tobacco Sector listed on the Egyptian Stock Exchange.
2) A Proposed Model for Measuring the Effect of Ownership Structure characteristics on the Relationship between Free Cash Flow and Real Earnings Management.