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This study aims to investigate how major big bath accounting practices and CEO turnover in Egypt relate to one another, as well as the first to use the CEO’s origin as a moderating factor.

This study uses 10-year longitudinal data from 2012 to 2021 and 290 firm-year observations from Egypt’s listed nonfinancial firms that witnessed CEO turnover to identify the significant big bath accounting practices in Egyptian businesses after the Egyptian revolution and the COVID-19 pandemic. Using fixed and random effect models, the authors investigate the impact of CEO turnover on company earnings during the first year of a newly appointed CEO as an indicator of big bath practices after controlling CEO gender, experience, firm size, leverage, return on assets, return on equity and industry. The hypotheses were investigated using static panel data.

The results show the presence of big bath practices in the Egyptian market. Furthermore, big bath accounting practices are positively correlated with CEO turnover. Moreover, the results indicate that big bath accounting practices are only endured when external CEOs are employed, rather than internal ones.

The sample size and availability of data are the main research limitations. In addition, this study only examined CEO turnover and CEO origin as moderators in big bath accounting. Thus, future research may consider other CEO characteristics and political factors associated with big bath practices.

The findings from this study offer valuable insights to investors and regulators for effective decision-making and governance practices within the Egyptian capital market, while also contributing to a more informed approach to emerging markets on a global scale.

The findings contribute to the big-bath and CEO turnover and origin literature by showing a lower ceiling for earnings manipulation and using Egypt as a case study due to its unique institutional environment.

This examine the impact of environmental, social and governance (ESG) performance on financial reporting quality (FRQ) before and during COVID-19 in the Egyptian market.

This study uses quarterly data from 2017 to 2021 to draw conclusions, with a sample consisting of 486 firm-year observations for 27 Egyptian companies listed on the Standard and Poor’s/Egyptian Stock Exchange ESG index. This study uses both firms’ ESG scores and the Beneish Model, an earnings detection model, as proxies for FRQ. COVID-19 effects on ESG performance and FRQ were examined by using Pearson’s correlation coefficient and two-stage least squares.

COVID-19 has a significant impact on the link between ESG and FRQ. This implies that corporations with high ESG performance are less likely to manipulate earnings (having a low M-score) and thus provide high FRQ during the COVID-19 pandemic. Moreover, there is a significant positive relationship between firm size, leverage and M-Score, indicating that large firms typically present a high FRQ.

The sample size and data availability are the main research limitations. Additionally, this study only considers the effects of firms’ ESG performance on FRQ during the COVID-19 pandemic. Thus, future research should consider other factors associated with investors’ corporate social responsibility (CSR).

This research has practical implications for market regulators seeking to establish a legislative framework and enhance guidance to mandate managers to provide ESG data and CSR reports appropriate for Egypt and other developing economies in times of crisis.

Promoting the adoption of ESG practices in business, particularly during crises, has the potential to effectively provide high-quality and reliable financial reporting required for investment.

This study aspires to address notable deficiencies in the pertinent literature concerning the relationship between ESG performance and FRQ during COVID-19. To the best of the authors’ knowledge, little is known about how ESG performance changes in response to pandemics in emerging markets. To address this gap, this study examines the effects of COVID-19 on the relationship between ESG performance and FRQ in Egyptian-listed firms from 2017 to 2021.