Global Journal of Management and Business Research, D: Accounting and Auditing, Volume 22 Issue 2

expressed by auditors. In the absence of such a database in France, direct research is undertaken to gather the necessary information concerning this study. It can be considered an essential factor concerning the reliability and validity of the results obtained. To better explain the impact of reserves on stock prices around the chosen event dates, the study is also conducted on the subgroups detailed in Table 2. Empirical tests are performed on the following data: • All reservations and refusals to certify are mentioned in the annual and consolidated reports; • All reservations not explicitely mentioned in the paragraph of the auditor's opinion, in the annual and consolidated reports. It should be emphasized that certain information mentioned in words in the form of an observation or a remark is the basis of this investigation; • All the reservations issued for the first time (and also for the second and third) in the annual and consolidated accounts of all the companies in the sample (the method chosen by DDHL); • All of the reservations (except the first reservation) are expressed in the annual and consolidated accounts of the companies in the sample; • All the reservations are expressed on the consolidated accounts from the year 2016. All results assume an accumulation over the interval (-30, +30) around the chosen announcement date. To facilitate the presentation of the results, the interval -15 to +25 is retained on the graphs, it can be reduced in certain tables. a) The impact of the announcement of reservations and the refusal to certify issued by the statutory auditors In a first step, the average abnormal return and the cumulative average abnormal return were calculated for all the reservations and refusals to certify issued by the auditors. Table 3 shows the reservations and denials to certify mentioned by the statutory auditors in the annual and consolidated reports of the companies in the sample. The results show an adverse reaction around the event date (from twenty days before the event date until the end of the study period) 11 11 The results in Table 3 are obtained by the naive approach of deducting the return of the index from that of the stock. However, the results obtained are not very sensitive to methodological variants Soltani [1992]. . The average abnormal return is negative and significant one day before the event date (-0.32% with a t Student of 2.04). At date zero (date AG-15), the average abnormal return is 0.04% (t Student 0.29) but is insignificant. The magnitude of negative profitability in the following days becomes increasingly essential. From the third day after the date of the event (the return is 0.46% with a t Student of 2.94 on the date t+3), these returns are often negative 12 Date . Table 3: Overall impact of reservations and refusal to certify on shareholder wealth Excess profitability Cumulative excess T-test Cumulative T-test -5 -0,30 -0,82 -1,93 -1,04 -4 0,06 -0,76 0,41 -0,94 -3 -0,13 -0,76 -0,01 -0,97 -2 -0,19 -0,96 -1,27 -1,14 -1 -0,32 -1,28 -2,04 -1,49 0 0,04 -1,23 0,29 -1,42 1 -0,24 -1,47 -1,55 -1,67 2 0,11 -1,36 0,71 -1,52 3 -0,46 -1,82 -2,94 -2,00 4 -0,12 -1,94 -0,76 -2,10 5 -0,22 -2,17 -1,43 -2,31 6 -0,43 -2,60 -2,77 -2,74 7 -0,04 -2,64 -0,25 -2,75 8 -0,24 -2,88 -1,51 -2,95 9 -0,09 -2,78 0,60 -2,81 10 -0,27 -3,05 -1,73 -3,05 Note: Returns (excess and cumulative) are expressed as a percentage. Abnormal returns are defined concerning the market model; the announcement is assumed to be 15 trading days before the general meeting, and the number of observations is 288. 12 When using the second and third event date, the results are also significant even one day after the event date. The average abnormal return is 0.61% with a t Student of 4.12 on date t1 one day before the second event date; date of signature of the auditor's report. In the case of the third event date, the significance of the returns is observed from the first day after date zero (the return of -0.44% with a t student of 2.84 on date t1, these results are not detailed here, see Soltani [1993]). Informational Performance of Audit Reports Content: Case of French Companies Listed on the Stock Exchange during the Decade 2010-2020 7 Global Journal of Management and Business Research Volume XXII Issue II Version I Year 2022 ( )D © 2022 Global Journals