Effect of the Mandatory Adoption of IFRS on Real and Accruals-based Earnings Management: Empirical Evidence From France

  • Authors

    • Mouna Sellami Department of Finance and Accounting Faculty of Economics Sciences and Management, Sfax University, Tunisia
    • Hamadi Fakhfakh Department of Finance and Accounting College of Business Administration, Jazan University, Saudi Arabia P.O. Box 114, 45142, Jazan, KSA
    2013-12-23
    https://doi.org/10.14419/ijaes.v2i1.1485

  • Abstract

    The main purpose of this study is to examine whether the mandatory IFRS adoption within French listed companies provides higher earnings quality. More precisely, we study the impact of mandatory IFRS adoption on two approaches of earnings management: real and accruals-based earnings management. This study focuses on a sample of 1488 firm-year observations, 124 firms drawn from the 250 French-listed companies during the period from 1999 to 2011. We use the panel data for our analysis. Specifically, the FGLS estimator method is conducted in our regression models. Our results indicate that the absolute value of discretionary accruals is significantly reduced six years after the mandatory adoption of IFRS. We also find a negative association between the real earnings management and the mandatory adoption of IFRS. Overall, we can deduce that earnings quality is improved in the post-IFRS period in the French context.

     

    Keywords: Accruals-based earnings management; International Financial Reporting Standards (IFRS); Real earnings management.

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  • How to Cite

    Sellami, M., & Fakhfakh, H. (2013). Effect of the Mandatory Adoption of IFRS on Real and Accruals-based Earnings Management: Empirical Evidence From France. International Journal of Accounting and Economics Studies, 2(1), 22-33. https://doi.org/10.14419/ijaes.v2i1.1485

    Received date: 2013-11-08

    Accepted date: 2013-12-05

    Published date: 2013-12-23