An analysis on profit management practices of asset management companies

Asset management companies are businesses that take over the problematic assets of financial institutions, especially banks, undertake the risks that may arise from these problematic assets, and try to resolve these problematic assets by collecting and liquidating them. Profit management is the situation where the flexibility provided within the framework of generally accepted accounting principles, accounting standards and accounting policies are used to achieve certain purposes and thus mislead the users of the financial statements. When the studies in the literature on profit management are examined, it is seen that businesses implement profit management practices through the special provisions account, especially in the financial sector, due to the determination of discretionary accruals and the fact that they have a certain amount of decision-making authority during the preparation of financial statements. In this context, enterprises can take initiatives to increase the current period profit figure by decreasing the amount of profit for the current period by increasing the amount of special provisions when the profit amount is above the expectations, and by reducing the amount of special provisions set when the amount of profit is below the expectations. Profit obtained in profit management is presented in the financial statements by showing it sometimes higher and sometimes lower than it is, and affects the quality of the profit. The communication of the activities of asset management companies, whose importance in the financial system is rapidly increasing, with the business environment and other actors in the economy is naturally through financial statements. The operating results of asset management companies are evaluated through financial statements and investors make their decisions based on this information. For this reason, the accuracy and reliability of the information contained in the financial statements is extremely important. In this thesis, the profit management practices of the asset management companies operating in our country were tried to be estimated by creating models, and within the scope of the study, the profit management practices of the asset management companies through the special provisions account were determined, while other variables that could interact with the special provisions account in this process and some variables from macroeconomic factors were also included in the study. The results were tried to be interpreted. Keywords: Asset Management Companies, Troubled Assets, Profit Management, Financial Statements, Special Provisions Account.