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Earnings Management Thresholds: The Case in Tunisia

Author

Listed:
  • Anis Ben Amar

    (Faculty of Economics and Business, Universiti Kebangsaan Malaysia, 43600, Bangi, Selangor)

  • Ezzeddine Abaoub

    (Faculty of Economics Sciences and Management of Tunis, University of Tunis El Manar C.P. 2092 Tunis, El Manar – Tunisia)

Abstract

Degeorge, Patel and Zeckhauser (1999) show that companies willingly manage their earnings with the aim of meeting or exceeding three earnings targets: zero earnings, last period’s earnings, and analysts' earnings forecasts. In this paper, we focus on earnings management designed to achieve the above earnings thresholds within the framework of the Tunisian market. Applying Burgstahler and Dichev’s (1997) methodology type to the annual data corresponding to the period from 1997 to 2004, our results indicate that Tunisian companies managed earnings to avoid losses and earnings decreases rather than to avoid negative earnings surprises.

Suggested Citation

  • Anis Ben Amar & Ezzeddine Abaoub, 2010. "Earnings Management Thresholds: The Case in Tunisia," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 6(2), pages 35-56.
    • Handle: RePEc:usm:journl:aamjaf00602_35-56
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    File URL: http://web.usm.my/journal/aamjaf/vol6-2-2010/6-2-3.pdf
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    Citations

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    Cited by:

    1. 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.
    2. Sarra Elleuch Hamza & Nassira Kortas, 2019. "The interaction between accounting and real earnings management using simultaneous equation model with panel data," Review of Quantitative Finance and Accounting, Springer, vol. 53(4), pages 1195-1227, November.
    3. Ahmed Boussaidi & Mounira Sidhom Hamed, 2015. "The impact of governance mechanisms on tax aggressiveness: Empirical evidence from Tunisian context," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 5(1), pages 1-12, January.
    4. Jamel Eddine Mkadmi & Arem Say & Sana Saida, 2022. "The Impact of Internal Governance Mechanisms on Tax Risk in Developing Countries: An Empirical Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 86-94, September.
    5. Yi-Shu Wang & Jing Yang & Zhen-Jia Liu, 2017. "Meeting Dividend Thresholds through Earnings Management: A Cross-cultural Comparison," Applied Economics and Finance, Redfame publishing, vol. 4(3), pages 1-13, May.

    More about this item

    Keywords

    Earnings management; earnings thresholds; earnings distributions;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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