The Impact of Accounting Investigation on Earnings Management Practices in the Algerian Business Environment

Abstract

This study aimed to highlight the impact of one of the forms of tax control, namely the accounting investigation, on earnings management practices in the Algerian business environment. We conducted a comparative study of the behavior of the sample institutions that were subjected to the accounting investigation, and accordingly, the extent of their practice of earnings management was measured during two equal time periods, measuring earnings management practices before and after being subjected to the accounting investigation. For this purpose, the study was conducted on a sample of 6 active institutions in the southeast, which included 36 observations during the study period extending between (2017-2022). The Kothari model (2005, Kothari & all) was chosen to measure earnings management practices, as the study concluded that there are substantial indicators of earnings management practices in the Algerian business environment during the two periods under study, and secondly, that there is a clear impact of the accounting investigation on earnings management practices on the study sample