European Journal of Business Science and Technology 2024, 10(2):242-257 | DOI: 10.11118/ejobsat.2024.007

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

Bilal Kimouche1, Hemza Boussenna2
1 University of 20 August 1955, Skikda, Algeria
2 University of Oum El Bouaghi, Algeria

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.

Keywords: earnings management, discretionary accounting accruals, abnormal cash flows, Covid-19 period
JEL classification: M40, M41

Received: October 17, 2023; Revised: February 2, 2024; Accepted: March 18, 2024; Published: December 31, 2024  Show citation

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Kimouche, B., & Boussenna, H. (2024). Empirical Evidence About Earnings Management Behaviour Under the Covid-19 Period in Algerian Companies. European Journal of Business Science and Technology, 10(2), 242-257. doi: 10.11118/ejobsat.2024.007
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