scholarly journals Detecting tax evasion when tax and accounting earnings match

2017 ◽  
Vol 14 (2) ◽  
pp. 289-295
Author(s):  
Stavroula Kourdoumpalou
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Management Practices ◽  
Business Environment ◽  
Family Ownership ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
The Relationship

This paper attempts to review on how the effectiveness of board of directors and the executive compensations are moderated by internal ownership such as managerial and family ownership to mitigate earnings management. Most of prior studies focused on the traditional interaction among corporate governance mechanisms and earnings management, thus neglected that the variance of these practices that can be attributed to the business environment and the nature of ownership structure. This paper revisits the literature on the relationship between the factors of effectiveness of the board of directors in the individual level such as board independence, size, meeting frequency, CEO duality, audit and nominations-compensations committees, directors financial expertise, tenures and multiple directorship etc. and as a bundle through creating a score of effectiveness on the earnings management practices. It also reviews on whether the managerial and family ownership can moderate the relationship between the factors of effectiveness of the board of directors (as a score) and the total executive compensation with the earnings management practices. Panel data analysis method will applied over the data collected for ASE for the Jordanian listed firms for the period after the issuing of the Jordanian corporate codes in 2009. This paper’s contributes to the existing literature by providing an in-depth review of corporate governance mechanisms and earning management.

scholarly journals Impact of internal ownership on the monitoring and mitigating mechanisms of earnings management practices

2017 ◽  
Vol 14 (2) ◽  
pp. 289-295 ◽  
Author(s):  
Anas Najeeb Mosa Ghazalat ◽  
Md.Aminul Islam ◽  
Idris Bin Mohd Noor
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Management Practices ◽  
Business Environment ◽  
Family Ownership ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
The Relationship

This paper attempts to review on how the effectiveness of board of directors and the executive compensations are moderated by internal ownership such as managerial and family ownership to mitigate earnings management. Most of prior studies focused on the traditional interaction among corporate governance mechanisms and earnings management, thus neglected that the variance of these practices that can be attributed to the business environment and the nature of ownership structure. This paper revisits the literature on the relationship between the factors of effectiveness of the board of directors in the individual level such as board independence, size, meeting frequency, CEO duality, audit and nominations-compensations committees, directors financial expertise, tenures and multiple directorship etc. and as a bundle through creating a score of effectiveness on the earnings management practices. It also reviews on whether the managerial and family ownership can moderate the relationship between the factors of effectiveness of the board of directors (as a score) and the total executive compensation with the earnings management practices. Panel data analysis method will applied over the data collected for ASE for the Jordanian listed firms for the period after the issuing of the Jordanian corporate codes in 2009. This paper’s contributes to the existing literature by providing an in-depth review of corporate governance mechanisms and earning management.

scholarly journals Corporate governance and earnings management in New Zealand

2013 ◽  
Vol 10 (2) ◽  
pp. 40-55
Author(s):  
Dyna Seng ◽  
Justin Findlay
Keyword(s):  
Corporate Governance ◽  
New Zealand ◽  
Earnings Management ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Chief Executive ◽  
Audit Committees ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

This paper examines the relation between corporate governance mechanisms and earnings management. Using data collected from New Zealand listed companies for the financial year ending in 2005, the results show that the size of the board of directors is significantly positively associated with earnings management. This suggests that larger boards seem to be ineffective in their oversight duties relative to smaller boards. On the other hand, the independence of the board of directors, the independent role of the board chair and chief executive officer, and the independence of audit committees are not significantly associated with earnings management. Thus, these three corporate governance mechanisms are ineffective at monitoring the discretionary choices of management. The lack of effective corporate governance in New Zealand, particularly with regard to boards of directors, is mainly due to the lack of “experience and skills required to oversee the scale, complexity, and characteristics of finance operations” (Ministry of Economic Development, 2009, p.8)

Corporate Governance in Islamic Banks

2021 ◽  
pp. 322-337
Author(s):  
Sami Ben Mim ◽  
Yosra Mbarki
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Transmission Channels ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
Corporate Governance Mechanism

This study investigates the efficiency of the Shariah supervisory board as a corporate governance mechanism in Islamic banks. The authors mainly seek to examine the effect of the Shariah board's composition (size and academic background of its members) on the performance of Islamic banks. They also try to highlight the transmission channels explaining this effect, and compare the efficiency of the Shariah board with that of traditional corporate governance mechanisms, namely the board of directors. The empirical investigation is based on a sample of 72 Islamic banks from 19 countries. Estimation results suggest that the Shariah board positively affects the Islamic banks performance through the number of Islamic Shariah scholars. This effect is mainly due to the size and cost transmission channels. These results are robust to different performance measures. On the other hand, results show that the board of directors' size produces a positive effect on a bank's performance, offering evidence for complementarity between traditional and Islamic governance mechanisms.

scholarly journals The Predictive Power of K-Nearest Neighbor (KNN): The Effect of Corporate Governance Mechanisms on Earnings Management

SAGE Open ◽  
2020 ◽  
Vol 10 (3) ◽  
pp. 215824402094953
Author(s):  
Mengyun Wu ◽  
Martha Coleman ◽  
Jonas Bawuah
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Management Practices ◽  
Nearest Neighbor ◽  
K Nearest Neighbor ◽  
Governance Mechanisms ◽  
Corporate Managers ◽  
Long Run ◽  
Corporate Governance Mechanisms ◽  
The Impact

This study investigates the long-run effect of corporate governance mechanisms on earnings management of listed companies in Nigeria and Ghana. The study uses Ant Colony Optimization (ACO) and K-Nearest Neighbor (KNN) in establishing a long-run effect of good corporate mechanisms in reducing earnings management practice by corporate managers. ACO selected four major corporate governance mechanisms: Board Procedure Index, Board Disclosure Index, Ownership Structure Index, and Shareholders’ Rights Index; these were the key corporate governance mechanisms that influence the reduction in earnings management activities. KNN produced a strong significant longitudinal effect of implementing good corporate governance mechanisms in decreasing the manipulating behavior of managers. Quality corporate governance mechanisms’ implementation reduces the opportunistic behavior of corporate managers in manipulating earnings. Therefore, the study alert policymakers the urgency in setting up appropriate policies to enhance the reduction in earnings management practices to provide accurate financial information for stakeholders’ financial decision-making. The use of ACO and KNN in the study is a great novelty, which presents a calibration and prediction of the impact of corporate governance mechanisms on earnings management showing the rate of reduction.

scholarly journals Corporate governance and innovation: a theoretical review

2019 ◽  
Vol 28 (3) ◽  
pp. 266-284 ◽  
Author(s):  
Diego Asensio-López ◽  
Laura Cabeza-García ◽  
Nuria González-Álvarez
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Empirical Evidence ◽  
Ownership Structure ◽  
Theoretical Background ◽  
Future Research ◽  
Governance Mechanisms ◽  
Content Type ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

Purpose The purpose of this paper is to present a review of the literature on two lines of research, corporate governance and innovation, explaining how different internal corporate governance mechanisms may be determinants of business innovation. Design/methodology/approach It explores the theoretical background and the empirical evidence regarding the influence of both ownership structure and the board of directors on company innovation. Then, conclusions are drawn and possible future research lines are presented. Findings No consensus was observed regarding the relation between corporate governance and innovation, with both positive and negative arguments being found, and with empirical evidence not always pointing in the same direction. Thus, new studies trying to clarify this relationship are needed. Originality/value Over recent years, interest has grown in the influence of governance mechanisms on innovation decisions taken by the management. Innovation efforts and results depend on factors that are influenced by corporate governance, such as ownership structure or the functioning of the board of directors. Thus, the paper shows an updated state of the art in this field proposing future lines for empirical research.

scholarly journals Equity incentives, earnings management and corporate governance: Empirical evidence using UK panel data

2020 ◽  
Vol 17 (2) ◽  
pp. 104-123 ◽  
Author(s):  
Mohamed A. Shabeeb Ali ◽  
Hazem Ramadan Ismael ◽  
Ahmed H. Ahmed
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Earnings Management ◽  
Chief Executive ◽  
Governance Mechanisms ◽  
Governance System ◽  
Data Set ◽  
Equity Incentives ◽  
Corporate Governance Mechanisms ◽  
The Relationship

Using a UK panel data set drawn from 1675 Chief Executive Officer (CEO) year observations and 1540 Chief Financial Officer (CFO) year observations, we examine the relationship between CEO and CFO equity incentives and earnings management. In addition, we examine the moderation effect of corporate governance mechanisms on the relationship between executives’ equity incentives and earnings management. We use multivariate regression models to test our hypotheses. We find that CEO equity incentives are related to higher absolute and income increasing earnings management. These results support the managerial power theory argument that CEOs exploit equity-linked compensation to obtain more personal benefits without causing public anger. Contrary to CEO equity incentives, we could not find any significant relationship between CFO equity incentives and any of the earnings management proxies. In addition, we find that corporate governance quality (measured by individual mechanisms and overall index) has no effect on the relationship between executives’ equity incentives and earnings management. This result indicates that whereas some corporate governance mechanisms can reduce earnings management in general, they do not affect wealth driven incentives to manipulate accruals. In total, results question the effectiveness of the corporate governance system in mitigating opportunistic behavior motivated by executives’ compensation structures

scholarly journals Pengaruh Corporate Governance Terhadap Hubungan Keterlibatan Dewan Di Bidang Politik Dan Manajemen Laba

2021 ◽  
Vol 4 (2) ◽  
pp. 138-151
Author(s):  
Yeasy Darmayanti ◽  
Dandes Rifa ◽  
Irna Khairia
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Hypothesis Testing ◽  
Board Of Directors ◽  
Stock Exchange ◽  
Political Connections ◽  
Manufacturing Companies ◽  
The Board Of Directors ◽  
Negative Effect ◽  
The Relationship

This study aims to analyze the effect of corporate governance on the relationship between board involvement in politics and earnings management in manufacturing companies on the Indonesia Stock Exchange. This study used 63 manufacturing companies which were selected using purposive sampling method. The data analysis method used is multiple regression which is processed through the help of the SPSS program. Based on the results of hypothesis testing, it was found that the board of commissioners involved in politics had a significant positive effect on earnings management. Meanwhile, the board of directors with political connections and corporate governance individually has a significant negative effect on earnings management. In the results of hypothesis testing, it is also found that the board of commissioners and the board of directors who have political connections have a significant effect on earnings management with corporate governance as a moderating variable in manufacturing companies on the Indonesia Stock Exchange. The results of this study found that the implementation of corporate governance will have a different impact on the relationship between the board of commissioners and the board of directors on earnings management. In the relationship between the board of commissioners and earnings management, corporate governance is able to weaken earnings management activities. Meanwhile, in the relationship between the board of directors and earnings management, corporate governance can strengthen earnings management activities.

Can corporate governance mechanisms reduce earnings-management practices in Islamic banks?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Virasty Fitri ◽  
Dodik Siswantoro
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Management Practices ◽  
Stock Exchange ◽  
Islamic Banks ◽  
Governance Mechanisms ◽  
Loan Loss ◽  
Content Type ◽  
Corporate Governance Mechanisms

Purpose This study aims to provide empirical evidence on the role of corporate governance mechanisms in reducing earnings-management practices in Islamic banks in Asia. Design/methodology/approach This study used 28 Islamic banks in Asia, which were listed on the stock exchange from 2013–2017. The research method used quantitative regression with data on the characteristics of Islamic banks taken from the websites of each bank. This study used discretionary loan loss provision as a proxy for measuring earnings management. Findings The results show that only the audit committee size has a significantly negative effect on earnings management. An independent audit committee has a negative, but not significant, effect. The difference expectation signs cannot be interpreted further. Research limitations/implications Only a few components of corporate governance were tested in this study. Therefore, it is expected that future studies will include more components. Practical implications In general, the components of corporate governance that include the characteristics of the board of directors and the audit committee have a varied effect on reducing the earnings-management practices in Islamic banks, except audit committee size. In practice, audit committee size should have an important role in earning management reduces. Originality/value This may be the first paper that studies the effect of corporate governance on earnings management in Islamic banks in Asia.

scholarly journals Free Cash Flow And Earnings Management: The Moderating Role Of Governance And Ownership

2015 ◽  
Vol 32 (1) ◽  
pp. 255 ◽  
Author(s):  
Mehdi Nekhili ◽  
Ines Fakhfakh Ben Amar ◽  
Tawhid Chtioui ◽  
Faten Lakhal
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Cash Flow ◽  
Audit Committee ◽  
Management Practices ◽  
Audit Quality ◽  
Free Cash Flow ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms

<p class="Default">The purpose of this paper is to analyze the moderating effect of corporate governance and ownership features in lessening earnings management practices in a free cash flow (FCF) situation. A simultaneous equations model is developed to address endogeneity of the FCF variable. Based on a sample of French companies belonging to the SBF 120 index from 2001 to 2010, the results highlight the opportunistic behavior of managers in presence of free cash flows. Particularly, managers engage in earnings management practices that increase reported earnings. Our results also show that corporate governance mechanisms such as audit committee independence and external audit quality, in addition to institutional investors and managerial ownership reduce the extent of earnings management. Corporate governance mechanisms are substitutive in their monitoring role of managers’ behavior to reduce earnings management in presence of a free cash flow problem. </p>

scholarly journals Practices and mechanisms to mitigate the negative effects of accountingbased earnings management: An empirical study from the professionals’ perspective

2021 ◽  
Vol 8 (9) ◽  
pp. 15-28
Author(s):  
Monteiro et al. ◽  
Keyword(s):  
Corporate Governance ◽  
Empirical Study ◽  
Earnings Management ◽  
Theory And Practice ◽  
Professional Experience ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Relationship ◽  
And Training ◽  
Training Area

Accounting conservatism and Accounting-based Earnings Management Practices (AEMP) introduce bias in financial information (FI), thereby influencing stakeholder behavior in the decision-making process. This study aims to analyze, from the certified accountants’ perspective, the AEMP in Portugal. Specifically, it analyses (1) the development of the AEMP and its impact on FI reporting, (2) the main hampered on its implementation, and (3) the need for the instruments and corporate governance mechanisms to mitigate the AEMP. Besides this research analyses (4) the relationship between the certified accountant’s characteristics (gender, age, professional experience, educational qualifications, and training area. To achieve the proposed objectives, we have used a quantitative methodological approach with a survey questionnaire, conducting an empirical study based on a sample of certified accountants. Based on a sample of 159 certified accountants, the results found that the majority of respondents indicate that Portuguese companies develop AEMP and that these practices have a negative and significant impact on the quality of financial statements (FS). Moreover, most certified accountants point out that is important to adopt measures that will prevent the abuse of AEMP and the main instruments for this are the establishments of more precise and concrete accounting standards and the application of the sanctions. The results also indicate that the audit committee and efficient internal control are corporate governance mechanisms AEMP able of mitigating the effects of the AEMP. Finally, the individual characteristics of certified accountants, such as professional experience, educational qualifications, and training area, significantly influence their perception of the need to mitigate the AEMP. This study presents relevant contributions to theory and practice. First, it develops the literature that evaluates AEMP, particularly in Portugal, where studies are scarce. Second, this study is original because it considers the relationship characteristics of accounting and AEMP professionals. Third, it allows entities that operate in accounting standardization and for accountants and FI users to have a more in-depth knowledge of the AEMP’s instruments and mechanisms.

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