Accounting Manipulation and Weighted Average Cost of Capital: Detecting Earnings Management via Yoon and Miller (2006) Model: The Prospective of Pakistan

This research has been carried out to investigate the potential correlation between accounting manipulation and capital expenses of corporations listed on Pakistan Stock Exchange (PSX). The study examines 80 non-financial companies PSX from 2008 2019. researchers utilized Dynamic Panel Generalized Method Moments (GMM) for individual effects indicators analysis. To measure manipulation, Yoon & Miller (2006) model, Discretionary Accrual, is used as a proxy earnings management. also incorporated four control variables: firm size, Return Assets, Debt Equity, CEO Duality. findings suggest an inverse relationship discretionary accruals (DAC) Weighted Average Cost Capital (WACC). That say, when DAC increases, WACC decreases. On other hand, positive association exists non-discretionary WACC, indicating that managers may use inflate company's earnings. highlights need greater regulatory attention accruals, management in globally.