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Abnormal accounting accruals Management by market disciplinary approach: Evidence in Tunisian banks before and after the Arab Revolution

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  • Mohamed Sadok GASSOUMA

Abstract

This paper tests the effect of governance factor related to the shareholder ownership and to the auditor’s characteristic on the abnormal accounting accruals in Tunisian banks. The aim of this study is to estimate the abnormal accruals drawing on the classical Kothari et al (2005) [13] model to demonstrate their progress before and after Tunisian revolution. Indeed, through the difference-in-difference approach, “DID,†this paper attempts to deduct the disciplinary factors that contribute to follow up these accruals using a linear regression model. The results show that the accounting manipulation and net income smoothing in Tunisian banks worsened after the Tunisian revolution, contrary to what was expected. This aggravation is shown by the "DID" approach that was the result of the market discipline deterioration played by the majority of shareholders, the external auditors and the supervisory board. The overrun shareholders ownership in Tunisian banks have caused an interest collision between them and the managers. The latter in turn, made collisions with the external auditors through rewards for a long period. JEL classification numbers: M41, G01, G21, G3, H12, C58Keywords: abnormal accruals, accounting, corporate governance, agency conflict, difference-in-difference.

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  • Mohamed Sadok GASSOUMA, 2019. "Abnormal accounting accruals Management by market disciplinary approach: Evidence in Tunisian banks before and after the Arab Revolution," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 8(2), pages 1-2.
    • Handle: RePEc:spt:fininv:v:8:y:2019:i:2:f:8_2_2
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    More about this item

    Keywords

    abnormal accruals; accounting; corporate governance; agency conflict; difference-in-difference.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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