IDEAS home Printed from https://ideas.repec.org/a/men/journl/v10y2024i2p242-257.html

Empirical Evidence About Earnings Management Behaviour Under the Covid-19 Period in Algerian Companies

Author

Listed:
  • Bilal Kimouche

    (University of 20 August 1955, Skikda, Algeria)

  • Hemza Boussenna

    (University of Oum El Bouaghi, Algeria)

Abstract

This study explores the influence of the Covid-19 period on earnings management behaviour (EM) for 150 Algerian companies. The period of study (2018 to 2021) was divided into the pre-pandemic period (2018 and 2019) and the pandemic period (2020 and 2021). The study used two measures for earnings management: discretionary accruals (accounting EM) and abnormal cash flows (real EM). The results indicate that accounting EM decreased during Covid-19 compared to pre-Covid-19. But for real EM, it was the opposite; it has seen an increase during Covid-19. These results have many implications regarding the commitments of various contributors to preparing financial information and other related parties to ensure the accuracy of financial reporting during periods of crisis. More specifically, accounting standards setters should issue additional explanations regarding the accounting for some items, and auditors should extend the range of verification when certifying financial statements.

Suggested Citation

  • Bilal Kimouche & Hemza Boussenna, 2024. "Empirical Evidence About Earnings Management Behaviour Under the Covid-19 Period in Algerian Companies," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 10(2), pages 242-257.
    • Handle: RePEc:men:journl:v:10:y:2024:i:2:p:242-257
    DOI: 10.11118/ejobsat.2024.007
    as

    Download full text from publisher

    File URL: http://ejobsat.cz/doi/10.11118/ejobsat.2024.007.html
    Download Restriction: free of charge
    File URL: http://ejobsat.cz/doi/10.11118/ejobsat.2024.007.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.11118/ejobsat.2024.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ozili, Peterson K, 2021. "Accounting and financial reporting during a pandemic," MPRA Paper 105183, University Library of Munich, Germany.
    2. Roychowdhury, Sugata, 2006. "Earnings management through real activities manipulation," Journal of Accounting and Economics, Elsevier, vol. 42(3), pages 335-370, December.
    3. Filip, Andrei & Raffournier, Bernard, 2014. "Financial Crisis And Earnings Management: The European Evidence," The International Journal of Accounting, Elsevier, vol. 49(4), pages 455-478.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alessandro Paolo Rigamonti & Giulio Greco & Mariarita Pierotti & Alessandro Capocchi, 2024. "Macroeconomic uncertainty and earnings management: evidence from commodity firms," Review of Quantitative Finance and Accounting, Springer, vol. 62(4), pages 1615-1649, May.
    2. Viana, Jr., Dante Baiardo C. & Lourenço, Isabel & Black, Ervin L. & Martins, Orleans Silva, 2023. "Macroeconomic instability, institutions, and earnings management: An analysis in developed and emerging market countries," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 51(C).
    3. Lizińska, Joanna & Czapiewski, Leszek, . "Zarządzanie zyskami w czasie kryzysu finansowego COVID-19: doświadczenia Polski," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2023(1).
    4. repec:bcp:journl:v:8:y:2024:i:1:p:1605-1622 is not listed on IDEAS
    5. Mohammad Abweny & Rizwan Ahmed & Chonlakan Benjasak & Dung T. K. Nguyen, 2025. "The Influence of Sanctions on Corporate Reporting Behaviour: International Evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 3322-3339, July.
    6. Georgiana Burlacu & Ioan-Bogdan Robu & Ionela Munteanu, 2024. "Exploring the Influence of Earnings Management on the Value Relevance of Financial Statements: Evidence from the Bucharest Stock Exchange," IJFS, MDPI, vol. 12(3), pages 1-20, July.
    7. Ioannis Dokas & Christos Leontidis & Nicolaos Eriotis & Konstantinos Hazakis, 2021. "Earnings Management. An overview of the relative literature," Bulletin of Applied Economics, Risk Market Journals, vol. 8(2), pages 25-55.
    8. Anh Tuan Dang & Nguyen Ngoc Khanh Dung, 2024. "The Impact of Covid-19 on Earnings Management: Empirical Evidence from Vietnam," SAGE Open, , vol. 14(3), pages 21582440241, July.
    9. Aljughaiman, Abdullah A. & Nguyen, Tam Huy & Trinh, Vu Quang & Du, Anqi, 2023. "The Covid-19 outbreak, corporate financial distress and earnings management," International Review of Financial Analysis, Elsevier, vol. 88(C).
    10. Tiago Gonçalves & Cristina Gaio & André Ferro, 2021. "Corporate Social Responsibility and Earnings Management: Moderating Impact of Economic Cycles and Financial Performance," Sustainability, MDPI, vol. 13(17), pages 1-14, September.
    11. Shafu Zhang & Like Jiang & Michel Magnan & Lixin Nancy Su, 2021. "Dealing with Ethical Dilemmas: A Look at Financial Reporting by Firms Facing Product Harm Crises," Journal of Business Ethics, Springer, vol. 170(3), pages 497-518, May.
    12. Kałdoński, Michał & Jewartowski, Tomasz & Mizerka, Jacek, 2020. "Capital market pressure, real earnings management, and institutional ownership stability - Evidence from Poland," International Review of Financial Analysis, Elsevier, vol. 71(C).
    13. Emmanuel Mensah & Joseph Kwadwo Tuffour & Mamdouh Abdulaziz Saleh Al-Faryan, 2023. "Does macroeconomic misery index matter in the micro firm-level earnings Management – performance nexus? Evidence from dynamic Panel threshold regression," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2289321-228, October.
    14. Davis, Frederick & Khadivar, Hamed, 2024. "Accrual and real earnings management by rumored takeover targets," International Review of Financial Analysis, Elsevier, vol. 92(C).
    15. Manish Kumar & Madhu Vij & Rishabh Goswami, 2021. "Effect of Real Earnings Management on Firm Performance: Evidence from India," Vision, , vol. 27(3), pages 386-396, June.
    16. Eng, Li Li & Fang, Hanqing & Tian, Xi & Yu, T. Robert & Zhang, Hongxian, 2019. "Financial crisis and real earnings management in family firms: A comparison between China and the United States," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 59(C), pages 184-201.
    17. Zahra H. Oskouei & Zahra Heidary Sureshjani, 2021. "Studying the relationship between managerial ability and real earnings management in economic and financial crisis conditions," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4574-4589, July.
    18. Emmanuel Mensah & Christopher Boachie, 2024. "The Threshold Effects of National Governance Quality on the Earnings Management – Performance Nexus: Evidence From Dynamic Panel Threshold Regression," SAGE Open, , vol. 14(4), pages 21582440241, December.
    19. Peterson Kitakogelu Ozili, 2020. "Financial reporting under economic policy uncertainty," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 19(2), pages 325-338, December.
    20. Joanna Lizińska & Leszek Czapiewski, 2023. "Earnings Management amid the COVID-19 Financial Crisis: The Experience of Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 93-112.
    21. Hsu, Yu-Lin & Yang, Ya-Chih, 2022. "Corporate governance and financial reporting quality during the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 47(PB).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:men:journl:v:10:y:2024:i:2:p:242-257. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ivo Andrle (email available below). General contact details of provider: https://edirc.repec.org/data/femencz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.