Earnings Management, Accounting Thresholds and Corporate Governance: The Case of French Firms

Gestion des résultats, seuils comptables et gouvernance d’entreprise: le cas des sociétés françaises

Badreddine Hamdi (), Tarek Mejri () and Sameh Haloua
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Badreddine Hamdi: CREGO - Centre de Recherche en Gestion des Organisations (EA 7317) - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]
Tarek Mejri: UP13 - Université Paris 13

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Abstract: The purpose of this paper is to examine the influence of governance mechanisms on the earnings management to exceed thresholds. Using a sample of 214 French companies listed on the CAC All Tradable index (former SBF 250) for the 2005-2014 period, we find that some French firms tend to manage earnings in order to avoid losses, decreases in earnings and earnings below the forecasts of analysts. We also find evidence that earnings management to exceed thresholds is affected by the structure of the ownership. Furthermore, our results show that, the level of earnings management is affected by the independence and the activity of the audit committee and by the independence of the board of directors.

Keywords: Earnings Management; Corporate Governance; Analysts’ Earnings Forecasts; Accounting Thresholds; Gestion des résultats; Seuils comptables; Gouvernance d’entreprise; Prévisions des analystes (search for similar items in EconPapers)
Date: 2018
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Published in Finance Contrôle Stratégie, 2018, 21 (3), pp.51-77. ⟨10.4000/fcs.2838⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01982320

DOI: 10.4000/fcs.2838

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