Revue algérienne d'économie et gestion
Volume 14, Numéro 2, Pages 443-464

Empirical Evidence About The Impact Of Debts And Their Cost On Real Earnings Management In Algeria

Authors : Kimouche Bilal . Cherroun Azzeddine .


This study aims to provide empirical evidence about the impact of debts and their cost on real earnings management in the Algerian companies. The study included 119 firm-year observations for 17 Algerian companies during the period 2012-2018, using the model of abnormal cash flows for Roychowdhury (2006) to measure real earnings management, and a multiple linear regression model to test the hypotheses. According to the results, debts and their cost do not have any impact on real earnings management in the Algerian companies. These results are inconsistent with the results of most previous studies due to the specificities of economic and institutional Algerian environment, where the debt covenant is prepared in a different manner, when compared with the developed environments.


Financial reporting quality ; Real earnings management ; Abnormal operating cash flows ; Financial leverage ; Cost of debts