Earnings management around mergers and acquisitions: evidence from a range of French absorbing firms' accounting policy

Mouna Njah and Anis Jarboui

Global Business and Economics Review, 2016, vol. 18, issue 5, 550-566

Abstract: The objective of this study consists in implementing an empirical assessment with regard to the validity of the earnings management hypothesis within the specific mergers and absorptions' context. Using a sample of 76 French undertaken mergers and absorptions occurring over the period ranging from 2000 to 2010, the achieved empirical results reveal that the discretionary-accruals average value for the acquiring firms turns out to be positive with regard to the year preceding a merger conclusion. Indeed, the absorbing firms' average discretionary accruals prove to vary between 5.99% and 7.34% of the total assets, depending on the adopted earnings-management evaluation model.

Keywords: mergers and acquisitions; M%A; earnings management; France; accounting policy; discretionary accruals. (search for similar items in EconPapers)
Date: 2016
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