The Impact of Earnings Management on Stock Returns: The Case of Tunisian Firms

§ University of Mannouba.,Tunisia
‡ Graduate Institute of management in Tunis.
Warocqué Faculty of Economics and Management.
‖ University of Mannouba, Tunisia (ISCAE). Department ...

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The Impact of Earnings Management on Stock Returns: The Case of Tunisian Firms

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Abstract

Measuring earnings management is a crucial issue for stockholders and investors alike. Investors’ efficient evaluation of a firm (firm performance and its stocks returns on the stock market) depends on the selection of a measurement model appropriate to earnings management. Within this line of thinking, our study aims at presenting and comparing four earnings management measurement models examining Tunisian stock market information content and the ability to forecast managers’ behaviour. We classified the variable “discretionary accruals” into higher and lower levels and then analysed its effect on returns. The obtained results point to a significant coefficient for the two levels of discretionary accruals (according to the four models). This confirms that discretionary accruals allow Tunisian investors to better evaluate firm value and optimally form their stocks portfolios. Moreover, this study highlighted the determining role of firm size. For this latter, earnings management allows for increasing abnormal positive stocks returns for large Tunisian firms and reducing abnormal negative stocks returns for small Tunisian firms. In conclusion, if these accruals measurement models reach conclusions which are empirically reliable, this comes from the fact that they are very partial to reflect a complex reality.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Sonia Sayari, Fayçal Mraihi, Alain Finet, Abdelwahed Omri. 2026. "The Impact of Earnings Management on Stock Returns: The Case of Tunisian Firms". Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 13 (GJMBR Volume 13 Issue 29 (C10)).

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords
Classification
GJMBR-C Classification JEL Code: G32
Version of record

v1.2

Issue date
August 26, 2013

Language
English
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The Impact of Earnings Management on Stock Returns: The Case of Tunisian Firms

Sonia Sayari
Sonia Sayari
Fayçal Mraihi
Fayçal Mraihi
Alain Finet
Alain Finet
Abdelwahed Omri
Abdelwahed Omri