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RAF 5,2

In conclusion, neither of H2 and H3 is confirmed by our statistic analyses. In fact, small firms show a higher degree of conservatism than large ones in France. This result is consistent with findings in the US (Basu et al., 2001a, b; Ryan and Zarowin, 2001), despite the difference between the two countries’ institutional contexts (H4 and H5).

104

A serious problem was encountered in testing these hypotheses because of the limitations of the Worldscope database. Since Worldscope provides data only for the last year concerning the markets a company is listed on and the indexes it is included in (1999 in our study), we were not able to examine the trends in the earnings properties of French firms according to their international financing activities.

The only analysis possible is to compare the two groups in 1999. This gives a very interesting result, totally contrary to our hypotheses (see Table V): both Ball and Brown’s and Basu’s models are highly suitable for less internationalized French firms, but not at all suitable for those with intensive international financing. Obviously, no conclusion can be drawn from a one-year observation, but this indicates an interesting direction for future research if the data-collecting problem can be solved (H6 and H7 ).

Here, we obtain almost identical results to the analysis of firm size (Table VI). There was no clear change during the 1990s in timeliness and conservatism for companies audited either by Big Five or non-Big Five firms (Figures 5 and 6). However, the

0.528

0.000

0.336

0.000

0.054

0.820

0.002

0.915

0.012

0.836

0.011

0.974

Sig for 3

Table V. Trends in earnings properties according to international financing

R2

Non-international financing 0.303

International financing

0.000

Conservatism

Sig for m

odel

  • 3

Timeliness

  • 1

Sig for 1

R2

Table VI. Trends in earnings properties according to auditing firm

Timeliness Non-Big Five R2

  • 1

Sig for 1 Big five R2

  • 1

Sig for 1

Conservatism Non-Big Five R2 Sig for model

  • 3

Sig for 3 Big Five R2 Sig for model

  • 3

Sig for 3

0.088

0.091

0.082

0.052

0.251 0.049

0.048 0.134

0.072

0.046

0.225

0.331

0.228

0.088

0.197 0.081

0.145 0.261

0.188

0.089

0.001

0.000

0.001

0.006

0.000 0.006

0.006 0.000

0.001

0.006

0.005 0.003 6.000

0.000

0.000

0.000

0.000

0.000

0.126

0.000

0.279

0.071

0.350

0.183

1.306

0.797

0.720

0.535

0.351

0.564

0.139

0.435

0.000

0.611

0.000

0.000

0.006

0.050

0.123

0.177

0.119

0.115

0.093

0.052

0.272

0.087

0.081

0.316

0.189

0.082

0.002

0.001

0.004

0.055

0.000

0.004

0.005

0.000

0.000

0.003

0.371

0.446

0.252

0.023

0.072

0.194

0.435

1.610

1.050

0.428

0.043 0.218 0.202

0.931

0.442

0.024

0.099

0.000

0.000

0.026

1990

0.063 0.072 0.267

0.089 0.101

0.361

0.172

0.167 0.165

0.346 0.251

0.055 0.211

1991

0.171 0.002

0.075 0.188

0.002

0.000

0.002 0.049 0.289 0.121

0.030 0.196

1992

0.120

0.174 0.000

  • 0.031 0.168

0.642 0.017

0.243 0.170 0.064 0.336

0.000 0.000

0.081

0.000

1993

1999

1998

1997

1996

Year 1994

1995

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