Determinants of Financial Management Practices: A Conceptual Study

Abstract

The purpose of this study is to investigate various factors (uncertainty, corporate social dis
closure and stakeholder) that impact the selection of financial management practices. Further, this study attempts to explore the impact of financial management practices and earnings management on firm performance. In order to achieve the objective, a conceptual model has been developed based on previous theories and empirical literature. The findings of the study would be quite beneficial for capital providers – lenders and shareholders – who would like to use their funds for financial practices. On the other hand, capital providers will be hesitant to provide capital to those firms which do not use appropriate financial practices and have poor transparency.

Keywords: selection of financial management practices, earnings management, stakeholder theory, behavioral factors, corporate social disclosure, organizational performance, shareholder wealth maximization