The Determinants of Earnings Management: Empirical Evidence in the Tunisian Banking Industry

The objective of this paper is to determine factors explaining earnings management by universal banks in Tunisia. To examine this question, we conducted investigations in the empirical literature in this field of research, to select the major econometric models treating earnings management. Our sample consists of ten banks observed during the period from 1999 to 2010. Results show that there is a significant and positive relationship between earnings management proxied by discretionary accruals and operational risk, while loan loss provisions are inversely related to earnings management. We have also shown that the systematic risk, total risk and dividend per share do not explain earnings management practices by Tunisian banks