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

Informational Performance of Audit Reports Content: Case of French Companies Listed on the Stock Exchange during the Decade 2010-2020 11 Global Journal of Management and Business Research Volume XXII Issue II Version I Year 2022 ( )D © 2022 Global Journals Note: Based on the data in Table 5. The points joined by a solid line represent the average cumulative abnormal returns (CMARt). Graph 3: Announcement of reservations and refusal to certify issued for the first time ii. The impact of all the reservations except that of the first reservation After examining the informative content of the reservations issued for the first time, one can wonder whether all the reservations mentioned in the auditor’s reportsin the following years can have an impact on stock prices. These makes it possible to show the importance of the reaction of the stock market to the information mentioned in the reports of the auditors, knowing that the investors already hold information concerning the reserves announced in the first year. Despite information concerning reservations due to the announcement of this by auditors on company accounts in the past, the following results show that the impact of reservations and refusals to certify on stock prices is always negative and significant. Table 6 shows the average and cumulative abnormal returns around the first event date (AG-15). These returns are unfavorable well before the event date. For example, five days before the event date, profitability is significantly different from zero at the 5% threshold (- 0.50% with a t student of 2.04). These results show that investors can anticipate reservations issued by auditors on specific companies, because the information of the first reservation on these companies already exists. In addition, the significance of the results after the event date shows that the renewal of reservations and refusals to certify a very significant impact on the share prices of the companies concerned. Table 6: Announcement of reservations and refusal to certify issued except for the first time Date Excess return T-test Cumulative excess T-test on cumulative -5 -0,50 -2,04 -1,06 -0,85 -4 -0,06 -0,23 -1,12 -0,87 -3 0,04 0,04 -1,08 -0,83 -2 -0,35 -0,35 -1,42 -1,08 -1 -0,31 -0,31 -1,73 -1,28 0 -0,19 -0,19 -1,91 -1,39 1 -0,29 -0,29 -2,21 -1,59 2 0,12 0,12 -2,10 -1,49 3 -0,51 -0,51 -2,60 -1,82 4 -0,15 -0,15 -2,76 -1,89 5 -0,44 -0,44 -3,19 -2,17 6 -0,41 -0,41 -3,61 -2,41 7 -0,14 -0,14 -3,75 -2,48 8 -0,24 -0,24 -3,99 -2,60 9 -0,19 -0,19 -4,17 -2,69 10 -0,21 -0,21 -4,38 -2,79 Note: The returns (excess and cumulative) are expressed in percentages. One hundred seven events are used. The supposed announcement date is set 15 days before the GA date. Abnormal returns are defined with reference to the market model ( = + + ). -1.8 -1.6 -1.4 -1.2 -1 -0.8 -0.6 -0.4 -0.2 0 0 2 4 6 8 10 12 14 16 18 Cumulative T-test