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

Table 2: Regression for Estimating Non-Discretionary Accruals Taitait 1 Variables 2015 2016 2017 Ait1 -580.6716 855606.2*** 1.35e+07*** (566.3403) (4991.102) (821380.3) Revait1 0.0214181*** 0.3472379*** -1.46821*** (0.0004031) (0.0308515) (0.0369424) Ppeaiti -0.5150474*** -1.125916*** 0.1502641* (0.047493) (0.0074918) (0.0834932) Obs 1 495 1 495 1 495 Prob > F 0.0000 0.0000 0.0000 R-squared 0.6626 0.9616 0.7317 Adj R- squared 0.6619 0.9615 0.7311 Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Were denotes the total accruals of the firm , ∆ is the change in sales between the years and −1 ( − −1 ), is the gross property, plant and equipment of each firm, − is the total assets of the firm for the year −1 , is the error term, = 1,..., N, and =1,..., T. Thus, from the financial statements data of our sample, we use the ordinary least square method to estimate the parameters of the equation in step 2 in order to determine the so-called normal accruals. Consequently, the discretionary accruals (AD) are given by the following: Discretionary a (AD) = Total a ( ) – Normal (AN) Conversely, discretionary accruals show a negative average of 15% of the total accruals in large companies, while the average effective tax rate is equal to 33.06% in this sub-sample of firms. This different level of accruals is justified by the fact that the top management in large companies, which are mostly multinationals, is not renowned for their propensity to use their discretionary power when it comes to produce financial information. In the opposite, SMEs are known for their opacity in their information production process. Moreover, the effective tax rate is higher in the latters as compared to the standard tax rate of. It stands to the reason that SMEs are often subject to penalties related to the manipulation of their financial and accounting information. We note that on the whole sample, the accounting data of 2017 are handled down and represents more than 86% of the total accruals, as compared to 2016 (71%) and 2015 (23%). For that years, the average effective tax are of 38%, 42.6% and 39.35% respectively. This suggests that when the data is manipulated upwards, firms pay more taxes and vice versa. By observing the financial ratios, it appears that firms are financially, but not economically, profitable in both 2016 and 2017. Their yearly average long-term debt per unit of assets ratio is 10.47%, 10.39% and 9.68% respectively over the period 2015-2017. The average short-term debt ratio decreases to 83.5% of total assets in 2017, from 92.4% in 2015.We can therefore conclude that firms have reduced their short- term indebtness to use more long term debt in the Cameroonian context over the period 2015-2017. Table 3: Characteristics of the Sample by Type of Company (AD-Tie) Variables Obs Mean Std. Dev. Min Max Tie 1474 0.3801 0.5866 0.0000 4.7558 Ad 1474 -0.8616 3.4760 -28.0040 23.4204 Small and medium-size enterprises Tie 1327 0.3856 0.6114 0.0000 4.7558 Ad 1327 -0.9405 3.6340 -28.0040 23.4204 Large companies Tie 147 0.3307 0.2726 0.0000 1.8387 Ad 147 -0.1488 1.1819 -4.4662 6.8101 Taxation and Accounting Data Management: An Empirical Study in Cameroon © 2022 Global Journals 72 Global Journal of Management and Business Research Volume XXII Issue II Version I Year 2022 ( )D The sample of the study is then built up to reflect the Cameroonian economy, which is made up of more than 99% of SMEs. Indeed, SMEs represent 90% (1327) of the firms in sample, while large companies account for 10% (147). In the small and medium-size enterprises, the average value of discretionary accruals is equal to a negative 94% of the total accruals, and the effective tax rate is equal to 38.56% on average.