Open AccessEarnings Quality, Earnings Management, and Cross-listings: Evidence from French Firms
Author(s) -
Trabelsi Slaheddine
Publication year - 2015
Publication title -
management and economics research journal
Language(s) - English
Resource type - Journals
ISSN - 2469-4339
DOI - 10.18639/merj.2015.01.156495
Subject(s) - earnings management , cross listing , accrual , business , earnings , earnings quality , accounting , quality (philosophy) , listing (finance) , earnings per share , finance , corporate governance , philosophy , epistemology
This article examines the earnings quality of French firms cross-listed in the United States and United Kingdom, and non-cross-listed French firms. We examined the quality of financial reporting based on measures of earnings management, timely loss recognition (TLR), and price-earnings association. We found that both cross-listings and non-cross-listings show significant earnings smoothing activities and tend to use accruals to manage earnings, and are not timely in loss recognition. We surmise that cross-listing in the United States or United Kingdom has not changed the accounting choices of French cross-listing firms relative to firms that are not cross-listed. However, our findings show that the market considers earnings and book value data of cross-listing firms to be more informative than those of non-cross-listing firms.