Title: Earnings management around mergers and acquisitions: evidence from a range of French absorbing firms' accounting policy
Authors: Mouna Njah; Anis Jarboui
Addresses: Faculty of Economic Science and Management, Sfax University, Road of Aeroport, Km 4, B.P. 3018, Sfax, Tunisia ' Higher Institute of Business Administration, Sfax University, ISAAS B.P. 1013, Sfax, Tunisia
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.
Keywords: mergers and acquisitions; M&A; earnings management; France; accounting policy; discretionary accruals.
Global Business and Economics Review, 2016 Vol.18 No.5, pp.550 - 566
Received: 15 Feb 2014
Accepted: 14 Dec 2014
Published online: 01 Sep 2016 *