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Audit Quality and Earnings Management to Avoid Losses and Earnings Decreases: The French Case

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  • Anis Ben Amar
  • Mohamed Chabchoub

Abstract

Burgstahler and Dichev’s (1997) show that companies willingly manage their earnings with the aim of meeting or exceeding the two earnings targets: zero earnings and last period’s earnings. In this paper, we focus on the impact of audit quality on the distributions of earnings and distributions of earnings changes among a sample of SBF 250 listed firms from 2001 to 2007. The results obtained confirm prior findings in Burgstahler and Dichev of discontinuities around zero and prior year earnings in histograms of earnings. We also do not find evidence supportive that high-quality audits provide a constraint on earnings management to avoid losses and earnings decreases.

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  • Anis Ben Amar & Mohamed Chabchoub, 2016. "Audit Quality and Earnings Management to Avoid Losses and Earnings Decreases: The French Case," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(4), pages 20-27, October.
    • Handle: RePEc:hur:ijaraf:v:6:y:2016:i:4:p:20-27
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    References listed on IDEAS

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    2. Otuya Sunday & Ofeimun Godwin, 2017. "Effects of Board Globalizing on Financial Performance of Banks in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(4), pages 1-10, October.

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