Earnings management around mergers and acquisitions: evidence from a range of French absorbing firms' accounting policy
by Mouna Njah; Anis Jarboui
Global Business and Economics Review (GBER), Vol. 18, No. 5, 2016

Abstract: The objective of this study consists in implementing an empirical assessment with regard to the validity of the earnings management hypothesis within the specific mergers and absorptions' context. Using a sample of 76 French undertaken mergers and absorptions occurring over the period ranging from 2000 to 2010, the achieved empirical results reveal that the discretionary-accruals average value for the acquiring firms turns out to be positive with regard to the year preceding a merger conclusion. Indeed, the absorbing firms' average discretionary accruals prove to vary between 5.99% and 7.34% of the total assets, depending on the adopted earnings-management evaluation model.

Online publication date: Thu, 01-Sep-2016

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