Do Tunisian firms manage their earnings around the corporate tax rate cut?
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Author(s)Riadh GarfattaLink to ORCID Index: https://orcid.org/0000-0001-8929-7127
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Imen ZorgatiLink to ORCID Index: https://orcid.org/0000-0002-8506-7241
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Elmoez ZaabiLink to ORCID Index: https://orcid.org/0000-0002-9155-3545
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DOIhttp://dx.doi.org/10.21511/imfi.19(1).2022.27
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Article InfoVolume 19 2022, Issue #1, pp. 350-359
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- 578 Views
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238 Downloads
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Creative Commons Attribution 4.0 International License
Earnings management (EM, hereafter), which affects the quality of corporate financial information, continues to receive increased attention from practitioners and legislators. The paper deals with this topic and attempts to investigate the EM practices around the tax rate cut following the Tunisian tax reform of 2021. Evidence of EM is examined by focusing on both accounting and real EM. From a sample of 61 Tunisian public offering companies, observed from July 1, 2015 to June 30, 2021, the results estimated from the system GMM model argue that this tax rate reduction constitutes a real incentive to shift income from the period of higher tax rate (2020) towards the period of lower tax rate (2021) achieving significant savings for corporations. Furthermore, the results show that Tunisian firms have both accounting and real EM downward in the second half of 2020, and that the former is sharper. For the first half of 2021, the results show a joint use of accruals management and real management upwards, and that the latter is broader. These findings may be useful to tax policy-makers in the application of tax rules put in place to counter aggressive tax evasion. In addition, external auditors and tax auditors should consider the period around the change in the corporation tax rate to be more suspect.
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JEL Classification (Paper profile tab)C23, G30, H26, M41, M48
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References29
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Tables5
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Figures0
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- Table 1. Descriptive statistics
- Table 2. Pearson’s correlation matrix
- Table 3. Differences between earnings management means
- Table 4. Model (M1) estimate results
- Table 5. Model (M2) estimate results
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Why are we going to Green microfinance in Tunisia?
The aim of this paper is to shed light on the challenges that microfinance and the sustainability of its institutions (MFIs) can face when dealing with financial crisis and the alleviation of global poverty. Apart from its economic and social effects, microfinance has come to respond to increasing demands and take the environmental aspect into account, hence, the appearance of green microfinance. The pivotal role of the latter is to foster economic growth and investment through increasing the quality of the environment and the social inclusion. In this context, Tunisia has shown interest in the introduction of a new regulation that facilitates the allocation of green micro-credits. In order to combat poverty and reduce unemployment, ecological credits have been granted by the ENDA Tamweel microfinance institution. The ultimate goal of this study is to present the tendency of this new financing mechanism in Tunisia to achieve sustainable environmental development.
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Quantitative relationship between corruption and development of the Tunisian stock market
Ibtissem Missaoui , Mohsen Brahmi ,
Jaleleddine BenRajeb
doi: http://dx.doi.org/10.21511/pmf.07(2).2018.04
Public and Municipal Finance Volume 7, 2018 Issue #2 pp. 39-47 Views: 1562 Downloads: 153 TO CITE АНОТАЦІЯThe aim of this article is to seek especially the impact of corruption on the bond and stock market development. For the methodology/approach, the authors analyze a sample of 20 listed Tunisian firms from the Stock Exchange and Financial market, covering the period from 2006 to 2016 by using pooling cross section techniques. The results find a significant positive effect of the level of corruption on the stock market index and the logarithm of capitalization. This is consistent with the view that corruption accelerates the economic growth by speeding up transactions and allowing private companies to overcome the inefficiencies imposed by the government. Furthermore, the results find a negative association is not significant with the dependent variable of traded value as a percentage of the number of listed companies.
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The effect of investor sentiment on the means of earnings management
Sorah Park
doi: http://dx.doi.org/10.21511/imfi.15(1).2018.02
Investment Management and Financial Innovations Volume 15, 2018 Issue #1 pp. 10-17 Views: 1464 Downloads: 504 TO CITE АНОТАЦІЯPrior research has shown that a firm’s tendency to meet or beat earning targets is greater during bad economic times than good times. The paper extends this line of research by investigating which means of earnings management is used in different states of economy. A sample of non-financial companies listed on Korea Securities Market from 2003 to 2011 is used for empirical tests. The findings of this study are summarized as follows. The magnitude of discretionary accruals is negatively related to investment sentiment, indicating that firms tend to use positive discretionary accruals to manipulate reported income upward when the sentiment is pessimistic. However, the real activity based earnings management is not significantly associated with the state of economy. Collectively, this study contributes to behavioral finance and accounting literature by suggesting that managers use discretionary portion of accruals, but do not change their real operating activities, in order to meet or beat earnings targets in economic downturn.
