Empirical Evidence About Earnings Management Behaviour Under the Covid-19 Period in Algerian Companies

Bilal Kimouche and Hemza Boussenna
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Bilal Kimouche: University of 20 August 1955, Skikda, Algeria
Hemza Boussenna: University of Oum El Bouaghi, Algeria

European Journal of Business Science and Technology, 2024, vol. 10, issue 2, 242-257

Abstract: This study explores the influence of the Covid-19 period on earnings management behaviour (EM) for 150 Algerian companies. The period of study (2018 to 2021) was divided into the pre-pandemic period (2018 and 2019) and the pandemic period (2020 and 2021). The study used two measures for earnings management: discretionary accruals (accounting EM) and abnormal cash flows (real EM). The results indicate that accounting EM decreased during Covid-19 compared to pre-Covid-19. But for real EM, it was the opposite; it has seen an increase during Covid-19. These results have many implications regarding the commitments of various contributors to preparing financial information and other related parties to ensure the accuracy of financial reporting during periods of crisis. More specifically, accounting standards setters should issue additional explanations regarding the accounting for some items, and auditors should extend the range of verification when certifying financial statements.

Keywords: earnings management; discretionary accounting accruals; abnormal cash flows; Covid-19 period (search for similar items in EconPapers)
JEL-codes: M40 M41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:men:journl:v:10:y:2024:i:2:p:242-257

DOI: 10.11118/ejobsat.2024.007

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