The moderating effect of audit quality on the relation between shareholder activism and earnings management: Evidence from France
The moderating effect of audit quality on the relation between shareholder activism and earnings management: Evidence from France
Author(s): Souha Bouaziz Sial, Anis JarbouiSubject(s): Business Economy / Management, Financial Markets
Published by: Akademia Ekonomiczno-Humanistyczna w Warszawie
Keywords: shareholder activism; discretionary accruals; earnings management; audit quality index
Summary/Abstract: The present paper aims to provide empirical evidence regarding the impact of shareholder activism on earnings management. Specifically, it is focused on investigating the moderating role of an external governance mechanism such as external audit quality. Based on a sample of French companies listed on the French stock market index (SBF 120 index) from 2008 to 2012, we apply several multiple regressions using a standard methodology devised by Aiken and West (1991). We find that external audit quality plays a moderating role between shareholder activism and earnings management in such a way that it greatly helps to attenuate the relationship in the presence of high-quality external audits.
Journal: Contemporary Economics
- Issue Year: 13/2019
- Issue No: 1
- Page Range: 63-78
- Page Count: 16
- Language: English
