1 / 19

PhD Candidate Imen BenSlimene

PhD Candidate Imen BenSlimene. Audit quality and real activities manipulation in Europe. 8th Annual Graduate Student Conference. Dissertation Supervisor Pr. Pascal Dumontier. Presentation Outline. Introduction RESEARCH QUESTION ReseArch objective Literature Review Hypotheses

uyen
Download Presentation

PhD Candidate Imen BenSlimene

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. PhD Candidate ImenBenSlimene Audit quality and real activities manipulation in Europe • 8th Annual Graduate Student • Conference Dissertation Supervisor Pr. Pascal Dumontier

  2. PresentationOutline • Introduction • RESEARCH QUESTION • ReseArch objective • LiteratureReview • Hypotheses • Research design • Conclusion

  3. Introduction Accounting Numbers • Stock price Audit Quality Earnings Management

  4. Earnings management Acounting-based earnings management Discretionaryaccruals DeAngelo (1986) ; Jones (1991) ; Dechow et al.(1995) ; Dechow et al. (2003) ;Piot et al.( 2005) And /Or Healy and Whalen, 1999 Real activities manipulation Real earnings management Roychowdhury (2006), Zang (2007) , Gunny ( 2005 – 2009), Cohen et al. ( 2010)

  5. RESEARCH QUESTION What is the impact of audit quality on strategy choice for earnings management (accruals and / or real activities manipulation)?

  6. ReseArch objective To investigate whether constraints imposed on accounting-based earnings management by audit quality indirectly increases real activities manipulation in Europe

  7. LiteratureReview Subramanyam et al. (1998 ) High quality auditing constrains accounting –based earning management Becker et al. (1998) Francis et al. (1999) Audit quality and Accounting based earnings management Ehrabim (2001) Mrad (2004) High quality auditing does not constrain accounting –based earning management Piot and Janin (2004)/(2008) Ben Othman and Zeghal (2006)

  8. LiteratureReview Graham et al. (2005) Accrual constraints exerted by high quality audits can  motivate managers to switch to REM Gunny (2005) Audit quality and real activities manipulation Cohen et al. (2007) Yu ( 2008)

  9. Research design

  10. Measures of accrual-basedearnings management(Modified Jones model) Total accruals ACCT = EBXI – operating CFO Normal accruals ACCND t /TA t-1= 1(1/ TA t-1) + 2 (Δ CA/ TA t-1) +3 (Immob. t/ TA t-1) Discretionaryaccruals ACCD t = ACCT /TA t-1 – ACCND i

  11. Real Activities Manipulation (Roychowdhury, 2006) Sales manipulation Acceleration of the timing of sales throughincreasedprice discounts or more lenientcreditterms Reduction of discretionaryexpenses Decreases in discretionary expenses including advertising, R&D, and SG&A expenses Reporting of lowercost of goodssoldthroughincreased production Over- production

  12. Measures of Real Activities Manipulation (Roychowdhury, 2006)

  13. Audit Quality Mesures

  14. RESEARCH MODEL H1 H2

  15. Interest  of research  Analyze the behavior of earnings management in Europe  Analyse the role of audit quality on trade off between REM and AM  Examine the effects of member state audit environment on one hand and earnings management on the other

  16. Research Agenda / Difficulties • Research Agenda Continue running the model Start writingresults • Difficulties Database: certain variables are un-available (changed to available variables)

  17. THANK YOU FOR YOUR ATTENTION

More Related