The Effect of Financial and Eurozone Crisis on Accounting Quality of the Hospitality Sector

Abstract

This study examined the evolution of accounting quality in the Mauritian hospitality industry from 1999–2014 using accruals quality as a proxy for accounting quality. This study also determined whether the financial and Eurozone crisis affected accounting quality of the Mauritian hospitality firms. It has been observed that the accounting quality of the hospitality industry in Mauritius was very poor during the crisis period of 2009–2011. Hospitality firms in Mauritius might have used income-decreasing accruals during the crisis period and engaged in “big bath” practices; however, the poor accounting quality in the hospitality industry might have been due to real poor economic performance rather than big bath practices during the crisis period.