Earnings management surrounding CEO changes in France

La gestion du résultat comptable autour d'un changement de dirigeant en France

Yves Mard () and Sylvain Marsat ()
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Yves Mard: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand
Sylvain Marsat: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand

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Abstract: We analyse earnings management carried out by the outgoing and the incoming top managers from a sample of 52 French firms who encountered a change of CEO during the 2000-2005 period. The study of discretionary accruals shows that they engage in upwards earnings management during the two years preceding their departure. Then, we observe a very clear decline of accruals during the year of succession, according to the "big bath" hypothesis. During the years following the change, upward earnings management is observed in case of routine changes as soon as T+1, but only in T+2 in the case of a non routine departure. Finally, a multivariate analysis pinpoints, in the case of CEO changes, the influence of some governance mechanisms on accruals.

Keywords: CEO changes; routine changes; earnings management; non-routine changes; Changements de dirigeant; gestion du résultat; départ planifié; départ forcé (search for similar items in EconPapers)
Date: 2009
Note: View the original document on HAL open archive server: https://hal.science/hal-02156582
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Published in Comptabilité Contrôle Audit / Accounting Auditing Control, 2009, 3 (15), pp.141-169. ⟨10.3917/cca.153.0141⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02156582

DOI: 10.3917/cca.153.0141

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