Earnings Management, the Influence of Size, Indebtedness and Performance


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NOTE: Earnings Management, the Influence of Size, Indebtedness, and Performance is a well-researched topic, it can be used as a guide or framework for your Academic Research.


This study attempts to contribute to the research literature in the field of management of earnings results and how it is put into practice by Moroccan listed companies. The main question that the paper attempted to investigate is whether these companies’ managers use accounting results management in an opportunistic way.

The study was conducted on a sample of 54 companies on the Casablanca Stock Exchange between 2014 and 2016. The findings indicate that the guarantee of a stock market valuation to influence investors’ decisions is not at the heart of results management in Moroccan listed companies.

Nevertheless, the importance of the size factor and the satisfaction of the conditions imposed by the creditors to justify the level of the discretionary behavior of the managers in terms of accounting and financial information are noteworthy.


For the last decades, the rhythm of the economic game’s
mutations have been happening at a high speed and the new
techniques have experienced great development. The role
played by the financial markets has also become essential
and more destabilizing. Moreover, their hold on the life of
companies have increased with the growth of the number of
listed companies and with a large number of individual
shareholders making use of stock markets.

A new dimension is conferred on accounting. Accounting no longer
consists of recording simple monetary transactions
materialized by supporting documents and characterized by
payment deadlines very close to the delivery dates, but it
also aims to understand phenomena requiring valuations,
namely, estimation, expectations, as well as speculations:
depreciation of fixed assets, depreciation of inventories, etc.

However, the assignment of values to operations or
phenomena presuppose a certain capacity of judgment and
leads to a selection of arbitrary, disputable, and disputed
choices. Thus, with rudimentary knowledge and a little
practice in reading company accounts, it appears that the
balance of the income statement is not an arithmetic
objective balance but rather the result of construction and
the outcome of the evaluation, which can lead to different

Thus, the accounting results are a variable that
managers can act upon. That is what has been referred to as
results management (Shipper, 1989). While it is legal, the management of accounting results remains problematic insofar as it results in the reduction of the transparency of the financial statements and alters their comparability.

Two decades ago In Morocco, the financial market has
undergone several reforms. These focused on institutional
reorganization, product development (setting up of market
derivatives), and strengthening of the regulatory actions of
incumbents. The stock market has been shaken by several
financial scandals since the financial crisis of 2007.

The cases of accounting combinations are characterized by their frequency but also by the fact of reaching more and more
important amounts. It is the massive accounting
manipulations giving a false image of the situation which are
at the origin of the vast majority of financial scandals. In
Morocco, most listed companies abide by the IFRS and
publish their accounts in accordance with this new standard.
The objective of this article is to analyze the management of
results at the level of Moroccan listed companies.

It tries to seek answers to the question about how the public perceives
of the reliability and transparency of the financial statements
of listed companies. It is therefore about answering the two
following questions: What are the determinants of the management of
accounting results at the level of listed Moroccan
companies? (Taxation, the constraints exerted by the
banks or the stock market performance).

What are the means of highlighting the management of
results in the accounts established by listed Moroccan
companies? To answer these questions, this article is divided into three
sections. In the first section, we will introduce the literature
review concerning the definitions and the forms of results

Then, the second section will be devoted to the
analysis of explanatory theories. And at the end of the article,
we will present the sample, the methodology of the empirical
study as well as the results


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