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The aim of this paper is to test whether changes in the number of reported business segments can bring reported earnings closer to the earnings target. Specifically, we test whether changes of business segments are aimed at meeting the mean of the analysts? forecasts figure. On the basis of 1904 events of changes in the reported business segments, covering the 1994-2009 period, we find correspondences between these changes, by controlling their sign (positive or negative) and nature (accounting or real changes), pre-managed earnings (if they are above or below target) and discretionary accruals sign (positive or negative). These correspondences show, on the one hand, the possibility that some changes of reported segments can be undertaken in order to meet the earnings target and to report desired discretionary accruals. On the other hand, they show some use of changes in reported segments as a complementary tool to accruals in earnings management.Keywords: Changes in Reported Segments; Discretionary Accruals; Target Earnings; Pre-Managed Earnings.JEL codes: M41, C23, C33

Auteurs :Khanchel El Mehdi Imen
Extrait de la revue BMI 122