Identity, control and financial determinants of earnings management by accruals in listed Moroccan companies

Abstract

The aim of this article is to contribute to the research effort into earnings management (based on accruals estimated by the model of Kothari et al., 2005), by studying the various identity, control and financial determinants that drive Moroccan companies to make such an accounting choice. It seeks to better understand the motivations behind such a practice and the opportunistic behaviors of managers.

To this end, our study is based on logistic regression on a sample of 48 non-financial companies listed on the Casablanca Stock Exchange, over a seven-year period (2016-2022), processed using RStudio 4.4.0 software.  

The results show that these companies do indeed practice earnings management, and that company size (identity characteristic), ownership concentration (control characteristic) as well as financial performance and indebtedness (financial characteristics) have a significant impact on this practice.

Keywords: Earnings management, discretionary accruals, confirmatory study, identity-control-financial determinants.

JEL: M 41.

Type: Empirical research.