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Do dimensions of corporate social responsibility affect earnings management? Evidence from France

Anis Ben Amar (Department of Accounting and Law, ESC SFAX, Sfax, Tunisia)
Salma Chakroun (Faculty of Economics and Management, University of Sfax, Tunisia)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 11 June 2018

1573

Abstract

Purpose

This paper aims to examine the impact of corporate social responsibility (CSR) on earnings management measured by discretionary accruals based on Dechow et al.’s (1995) model with cash flow from operation.

Design/methodology/approach

This study uses a sample of 119 French non-financial companies listed on the CAC All Tradable index for the 2010-2014 period. All used regressions for the analysis are estimated based on panel data with random-effects.

Findings

Based on a panel data of 595 French firm-year observations during the period 2010-2014, the authors find a negative impact of CSR on earnings management, and some CSR dimensions negatively impact earnings management.

Practical implications

The results suggest several implications for regulatory in France, as well as those in other countries that try to implement CSR activities.

Originality/value

The originality of this work lies in the division of CSR into sub-dimensions defined by the ISO 26000 standard. This division reduces the complexity of societal reality and obeys a coherent institutional logic. In addition, it enables the operationalization of CSR in a new way to determine the impact of CSR on earnings management.

Keywords

Citation

Ben Amar, A. and Chakroun, S. (2018), "Do dimensions of corporate social responsibility affect earnings management? Evidence from France", Journal of Financial Reporting and Accounting, Vol. 16 No. 2, pp. 348-370. https://doi.org/10.1108/JFRA-05-2017-0033

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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