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

Note: This graph represents the cumulative returns over Table 3, 15 sessions before and 25 after the announcement date, which is supposed to be 15 days before the date of the general meeting. Graph 1: Excess returns around the announcement of reserves From the results of the tests of the impact of the announcement of reservations and the refusal to certify issued by the statutory auditors on the annual and consolidated financial statements, three main ideas emerge: • Average abnormal returns are negative around the different event dates. These returns are significant, especially in the interval -1, +3 (one day before and three days after the event dates); • Among the event dates used, the one corresponding to 15 days before the general meeting gives the most satisfactory results; • The application of the two market models, simple and Dimson, leads to often similar results in the case of each event date. The issuance of reservations and the refusal expressed by the statutory auditors in the annual and consolidated reports have a negative and significant impact around the date of the event. It shows that the market reacts to this lousy news well before the announcement date (15 days before the date of the general meeting). This trend will also continue after the event date. However, the choice of the announcement date is essential. Among the three hypotheses retained concerning the date of the event, it seems that fifteen days before the date of the general meeting, the announcement of reserves becomes public, and investors react unfavorably to this bad news. b) The impact of reservations observed but not explicitly mentioned in the paragraph of the auditor's opinion To identify the reservations expressed by the statutory auditors, over four thousand annual and consolidated company reports were examined. Regarding the opinion of the auditors, several types are mentioned in the reports. These are opinions expressed mainly in reservations, observations, remarks, and refusals to certify. In addition, the research carried out reveals certain types of anomalies concerning the conformity of the contents of the reports with the standards established by the CNCC. Among these anomalies, we can mention elements of reservations that are gathered following the standards of the CNCC but that have not been the subject of formal mention in the paragraph reserved for the opinion of the auditor. According to the research, sixty-seven such reserves were observed over the study period. For this category of reservations, the tests concerned are carried out separately, out of caution, only the reservations formally issued by the statutory auditors are retained for the empirical study. However, it is interesting to see whether the publication of information that is not officially expressed in the form of reservations in the reports of the statutory auditors, but which nevertheless contains elements of reservations according to CNCC standards, has an impact or not on stock prices. The same tests carried out on the reservations formally expressed in the reports of the statutory auditors are applied to this type of reservation. The results show (even though this information is not mentioned in the form of reservations formulated by the auditors in the annual reports) that the market reacts to this type of information. When we use the simple market model with a weighted index (Table 4), for the third event date (the average of two event dates), we observe negative abnormal returns, especially after the event date (-0.69% with a t Student of 2.17 on date 1+4, -3.5 -3 -2.5 -2 -1.5 -1 -0.5 0 -6 -4 -2 0 2 4 6 8 10 12 Cumulative excess Informational Performance of Audit Reports Content: Case of French Companies Listed on the Stock Exchange during the Decade 2010-2020 8 Global Journal of Management and Business Research Volume XXII Issue II Version I Year 2022 ( )D © 2022 Global Journals