تاثیر قدرت نفوذ بر مدیریت سود مبتنی بر تعهد: مورد شرکت های ذکر شده در فرانسه The impact of leverage on accrual-based earnings management: The case of listed French firms

1. Introduction After the recent accounting scandals caused by the bankruptcy of several large international firms, a crisis of confidence regarding the reliability of accounting information and the effectiveness of control mechanisms has occurred. In fact, managers can abuse the trust that is supposed to exist between firms and their stakeholders by acting on accounting results. Thus, we talk about the earnings management which has become one of the most discussed topics in the accounting literature. In this study, we are interested in the question of credibility of the financial information posed by the existence of earnings management through discretionary accruals. In fact, earnings management consists of taking advantage of the flexibility provided by accounting principles in order to manage earnings according to the interests of managers. The Positive Accounting Theory highlighted some basic incentives for earnings management, such as debt covenants, management compensation contracts and political costs. Thus, the link between debt contracts and the opportunistic earnings manipulation indicates a possible relationship between debt policy and earnings management. In this context, several studies have focused on examining this relationship and offers mixed results. On the one hand, some studies show that the leverage is positively associated with earnings management when firms want to reduce the likelihood of debt covenants violation and improve the firm’s bargaining during debt negotiation (Defond and Jiambalvo (1994), Iatridis and Kadorinis (2009), Chamberlain et al. (2014)). On the other hand, other studies have found a negative relationship between leverage and earnings management (Rodriguez-Pérez and Van Hemen (2010), Wasimullah et al (2010), Alshairiri and Salama (2011), Zamri et al. (2013), Afza and Rashid (2014), suggesting that managers in leveraged firms may face control from creditors, making it difficult for them to engage in earnings management. These different findings about the relation between leverage and earnings management can be explained by legal system country differences, as indicated in Othman and Zhegal (2006). Consequently, the theoretical debates and the divergence of empirical results explain the complexity and importance of this theme. Additional international evidence may usefully contribute to explaining the differences between countries. Thus, the impact of leverage on earnings management needs more and more investigations.