Institutional Activism, Auditor’s Choice and Earning Management after the Enron Collapse: Evidence from France
جاري التحميل...
التاريخ
المؤلفين
عنوان الدورية
ردمد الدورية
عنوان المجلد
الناشر
International Business Research
خلاصة
This paper investigates the relation between institutional shareholders, auditor's choice and earning management after the Enron collapse in the France. The French context is characterized by a weak contribution in financials markets, investor protection compared to Common Law countries and higher ownership concentration. Three hypotheses are tested: (1) the institutional shareholders influence positively the appointment of Big 4 auditors even after Enron scandals. (2) After Enron failure, there are no differences of audit quality through the discretionary accruals in French context between Big 4 and small audit firms. (3) The institutional investor has more incentives to control the manager opportunism through the discretionary accruals after Enron collapse. The sample is composed of 140 French listed companies on SBF 250 obtained from Thomason Financial data bases and annual reports between 2000- 2006. Empirical results show that the institutional ownership influence negatively the appointment of Big 4 auditors after Enron collapse. Elsewhere, univariate and multivariate analyses demonstrate that Big 4 have effect on the magnitude of discretionary accruals after 2002. Contrary to this finding, we find negatively and insignificant relation between the major institutional ownership and the discretionary accruals after Enron failure.
Keywords: Institutional shareholders, Auditor's Choice, Audit Quality, Earning Management and Enron Collapse