Industry Expertise of Independent Directors and Earnings Management

2012 ◽  
Author(s):  
Cong Wang ◽  
Fei Xie ◽  
Min Zhu
Keyword(s):  
Earnings Management ◽  
Independent Directors ◽  
Industry Expertise

scholarly journals Industry Expertise of Independent Directors and Board Monitoring

2015 ◽  
Vol 50 (5) ◽  
pp. 929-962 ◽  
Author(s):  
Cong Wang ◽  
Fei Xie ◽  
Min Zhu
Keyword(s):  
Earnings Management ◽  
Chief Executive Officer ◽  
Audit Committee ◽  
Chief Executive ◽  
Ceo Turnover ◽  
Independent Directors ◽  
Compensation Committee ◽  
Board Monitoring ◽  
Industry Experience ◽  
Industry Expertise

AbstractWe examine whether the industry expertise of independent directors affects board monitoring effectiveness. We find that the presence of independent directors with industry experience on a firm’s audit committee significantly curtails firms’ earnings management. In addition, a greater representation of independent directors with industry expertise on a firm’s compensation committee reduces chief executive officer (CEO) excess compensation, and a greater presence of such directors on the full board increases the CEO turnover-performance sensitivity and improves acquirer returns from diversifying acquisitions. Overall, the evidence is consistent with the hypothesis that having relevant industry expertise enhances independent directors’ ability to perform their monitoring function.

HUBUNGAN BOARD DAN KOMITE AUDIT TERHADAP MANAJEMEN LABA

2010 ◽  
Author(s):  
Fivi Anggraini
Keyword(s):  
Corporate Governance ◽  
Moral Hazard ◽  
Earnings Management ◽  
Conflict Of Interest ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Earning Management ◽  
Independent Directors ◽  
Relationship Of ◽  
The Relationship

Earnings management is the moral hazard problem of manager that adses because of the conflict of interest between the manager as agent and the stakeholder and the owner as principal. The behavior of earnings management will immediately influence the reported earning. The aims of this research at examining the relationship of board and audit committe to earnings management. The samples of this research is all of companies member Corporate Governance Perception Index (CGPI) in the years of 2003-2006 which were listed in Jakarta Stock Exchange. The results of this study show that (1) the proportion of independent directors on the board had not significant relationship to earning management, (2) competence of independent directors on the board had not significant relationship to earning management, (3) the size of board had significant relationship to earning management, (4) the proportion of independent directors on the audit committe had not significant relationship to earning management, and (5) competence of members of the audit committe had significant relationship to earning management.

scholarly journals PENGARUH PERUSAHAAN KELUARGA DAN PERAN KOMISARIS INDEPENDEN TERHADAP PRAKTIK MANAJEMEN LABA DI INDONESIA

2017 ◽  
Vol 11 (1) ◽  
Author(s):  
Go Meliana Indah Lestari ◽  
Senny Harindahyani
Keyword(s):  
Earnings Management ◽  
Family Firms ◽  
Stock Exchange ◽  
Independent Directors ◽  
Multiple Linear Regressions ◽  
Banking And Finance ◽  
Linear Regressions ◽  
Problem Data

Family firms don’t have effective oversight, therefore they tend to do earnings management higher compare than others. This study aims to prove whether this phenomenon true or not and whether the role of independent commissioners have been effectively overcome the problem. Data used in this research covers all firms listed in Indonesian Stock Exchange for the period of 2012 to 2014, except for banking and finance sector. The study is conducted using multiple linear regressions. The result shows that there is no significant different between family firms and non-family firms to manage earnings, and the role of independent directors can’t decrease the earnings management in family firms.

scholarly journals Women in Board of Directors and Real Earnings Management: Accretive Share Buyback in Malaysia

2017 ◽  
Vol 9 (2) ◽  
pp. 48
Author(s):  
Abdulsalam Saad Alquhaif ◽  
Rohaida Abdul Latif ◽  
Sitraselvi Chandren
Keyword(s):  
Earnings Management ◽  
Board Of Directors ◽  
Gender Diversity ◽  
Real Earnings Management ◽  
Independent Directors ◽  
Women Directors ◽  
Corporate Board ◽  
Corporate World

Gender diversity of boards and reporting of earnings are two most debated issues in the corporate world. In this context, the paper explores how the presence of women directors on the corporate board influence real earnings management through accretive buyback programs. Using a sample of 601 firms’ observations that engage in accretive share buyback from 2010-2015, the findings reveal that existence of women directors on the board is associated with less engagement in accretive share buyback activities. We further find that firms with a higher number of independent directors are less likely to practice real earnings management through accretive buyback programs. Our paper contributes to the debate on gender diversity on boards and its influence on the utilisation of accretive buyback programs as a tool to real earnings management.

scholarly journals Earnings management, corporate governance, and ownership structure of Philippine initial public offerings

2021 ◽  
Vol 18 (4) ◽  
pp. 175-191
Author(s):  
Angelo O. Burdeos
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Initial Public Offerings ◽  
Ownership Structure ◽  
Stock Exchange ◽  
The Philippines ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Ceo Duality ◽  
Public Offerings

Prior studies examined the effect of corporate governance variables on discretionary current accrual, the most widely used measurement of earnings management. The principal-agent conflict implies that the size of the board, the percent of independent directors, CEO duality, and auditor prestige limit discretionary current accruals (DCA). This paper extends past studies by examining the effect of ownership structure on discretionary current accruals. The study determines the level of income-increasing earnings management of initial public offerings (IPOs) in the Philippines and the factors that explain it. Particularly, the paper examines the effect of ownership concentration and largest shareholder ownership on discretionary current accruals. The study uses a final sample of 105 IPO firms in Philippine Stock Exchange (PSE) from 2008 to 2018. Employing the modified Jones’s (1991) model to measure discretionary current accrual and multiple regression analysis, the study finds -4.19% discretionary current accrual on the average. It also reveals that the 2002 Philippine Code of Corporate Governance (PCCG) is ineffective in curbing earnings management. In addition, there is an insignificant relationship between the size of the board, CEO duality, ownership concentration, largest shareholder ownership and auditor prestige, and earnings management. Furthermore, the paper finds a significant relationship between the percent of independent directors, industry sector, return on assets (ROA) and cash flow from operations and earnings management.

The effect of gender composition in joint audits on earnings management

2019 ◽  
Vol 34 (5) ◽  
pp. 549-574 ◽  
Author(s):  
Fan-Hua Kung ◽  
Yu-Shan Chang ◽  
Minting Zhou
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Information ◽  
Real Earnings Management ◽  
Gender Composition ◽  
Institutional Setting ◽  
Content Type ◽  
Empirical Results ◽  
Industry Expertise

Purpose This paper aims to examine the association between gender composition of joint auditor pairs and the quality of reported financial information. More specifically, the authors attempt to assess whether and how these gender compositions affect the client firms’ earnings management behavior. Design/methodology/approach The authors utilized the unique institutional setting of Taiwan, where joint auditors are required by law. They studied the effect of gender in joint auditor pairs on accrual earnings management and real earnings management to achieve financial reporting objectives. Findings Empirical results indicate that engaging a woman as the lead auditor can constrain accrual earnings management, regardless of whether the joint auditor is male or female. The authors also found that all-male signing auditor pairs with industry expertise can significantly reduce accrual earnings management. The authors also documented that all-female signing auditor pairs and auditor industry expertise could drive clients to engage in real earnings management activities as an alternative to accrual earnings management. Originality/value The empirical results demonstrate that gender indeed plays a role in the quality of client’s reported financial information. Female auditors in a lead position and male auditors with industry expertise tend to be more successful in delivering better-quality audits.

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