Earnings management to exceed thresholds in continental and Anglo-Saxon accounting models: the British and French cases

Sameh Halaoua, Badreddine Hamdi () and Tarek Mejri ()
Additional contact information
Sameh Halaoua: Institut Supérieur de Gestion Sousse - Institut Supérieur de Gestion Sousse
Badreddine Hamdi: UB - Université de Bourgogne, 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

Post-Print from HAL

Abstract: The purpose of this paper is to compare the extent to which French and British firms manage their earnings in order to avoid losses, decreases in earnings and earnings below the forecasts of analysts. Further, this study aims to investigate the factors that potentially influence earnings management to exceed thresholds with reference to the Anglo-Saxon and continental accounting models. Britain and France, correspondingly, belong to those different socio-economic environments. Based on a panel data of 1771 French and 2057 British firm-year observations during the period 2002–2012, we show that all firms considered manage earnings to beat zero and last year's earnings. However, earnings management in order to meet analysts' forecasts appears to be more prevalent in British firms. Considering earnings management incentives, we find that firm size has a positive effect for all thresholds considered. Similarly, the signaling hypothesis is more evident for British firms for all thresholds examined. The corporate governance structure is also found to impact the extent of earnings management.

Keywords: Earnings management; Analysts' earnings forecasts; Corporate Governance; IFRS; Thresholds (search for similar items in EconPapers)
Date: 2017-01
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Research in International Business and Finance, 2017, 39 (Part A), pp.513 - 529. ⟨10.1016/j.ribaf.2016.09.019⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04292573

DOI: 10.1016/j.ribaf.2016.09.019

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().