Empirical analysis of relations between earnings management of the listed company and the corporate governance structure

2008 ◽  
Author(s):  
Pei-xin Wang ◽  
Zhi-yu Wang ◽  
Ting-xun Xiang
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Empirical Analysis ◽  
Listed Company ◽  
Governance Structure ◽  
Corporate Governance Structure

scholarly journals EFFECT OF CORPORATE GOVERNANCE ON REAL ACTIVITY-BASED EARNINGS MANAGEMENT: EVIDENCE FROM KOREA / ĮMONIŲ VALDYMO POVEIKIS, PAGRĮSTAS DARBO UŽMOKESČIO VALDYMU: KORĖJOS PAVYZDYS

2012 ◽  
Vol 13 (1) ◽  
pp. 29-52 ◽  
Author(s):  
Sun-A Kang ◽  
Yong-Shik Kim
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Earnings Management ◽  
Stock Exchange ◽  
Investment Decision ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Real Activity ◽  
Policy Makers ◽  
Reported Earnings

This paper aims to determine whether corporate governance affects manager's real operating or investment decision to control reported earnings. Through data analysis of firms listed on the Korean stock exchange, it was found that the aggregated measure of real activity-based earnings management decreases as the size of board is larger or as a greater proportion of external directors sit on the board. Those findings are almost the same, whether a corporate governance index composed by each BOD characteristics is employed, or problem caused by endogenous relationships among variables is controlled. The results provide the first empirical evidence that real activity-based earnings management is influenced by corporate governance structure. This focus on real activity-based earnings management suggests new avenues for research on corporate governance. The results offer some insights for policy makers interested in promoting legislation to ensure strong corporate governance in their nation. Santrauka Šiame straipsnyje siekiama nustatyti, kokią įtaką turi kompanijos vadovo sprendimai, susiję su gaunamų pajamų iš darbuotojų tiesioginės veiklos / operacijų ar investicinių sprendimų kontrole. Tyrime dalyvavo Korėjos kompanijos. Autorių atlikti tyrimai parodė, kad darbuotojų darbo užmokesčio valdymas yra efektyvesnis nei tiesioginė vadovo kontrolė. Straipsnyje minima, kad priėmus sprendimą valdyti darbo užmokesčius, būtina keisti visą įmonės valdymo struktūrą. Gauti rezultatai yra kaip siūlymas peržiūrėti atitinkamus nacionalinius teisės aktus Korėjoje.

scholarly journals The effect of pyramidal structures on earnings management: Evidence from Italian listed companies

2017 ◽  
Vol 14 (3) ◽  
pp. 64-73 ◽  
Author(s):  
Massimiliano Farina Briamonte ◽  
Felice Addeo ◽  
Fabio Fiano ◽  
Marco Sorrentino
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Group Structure ◽  
Governance Structure ◽  
Minority Shareholders ◽  
Corporate Governance Structure ◽  
Opportunistic Behaviour ◽  
Financial Scandals ◽  
Statistical Relationships ◽  
The Relationship

In recent years, business administration researchers and economic operators have become increasingly interested in ways to protect minority shareholders from opportunistic behaviour by the majority shareholders in control of company management. Scholars have further extended their attention to the systems of Corporate Governance after the failures and financial scandals involving some important international groups such as Enron (United States), Parmalat, and Giacomelli (Italy). These events have focused attention on the opportunistic use of technical discretion when drawing up financial information in the presence of incentives or subsidies linked to the expropriation of potential wealth generated through the Corporate Governance structure adopted by companies. Against this background of applying emphasis to the information included in financial statements as an important tool for the management of Corporate Governance conflicts, this paper intends to analyses the relationship between the practices of earnings management and the adoption of a pyramidal group structure within the Italian financial market. In particular, the contribution aims to prove whether earnings manipulation practices have been adopted with a higher frequency and a greater intensity within the listed pyramidal groups as well as whether any statistical relationships exist between the pyramidal structure and the earnings management phenomenon.

The motivations of earnings management and financial aggressiveness in American firms listed on the NASDAQ 100

2016 ◽  
Vol 17 (4) ◽  
pp. 397-420 ◽  
Author(s):  
Souhir Neifar ◽  
Khamoussi Halioui ◽  
Fouad Ben Abdelaziz
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Earnings Management ◽  
Ceo Compensation ◽  
Investment Decisions ◽  
Audit Fees ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Content Type ◽  
Ceo Characteristics

Purpose The purpose of this paper is to examine the motivations of earnings management and financial aggressiveness levels in the big 100 companies listed on the NASDAQ 100 after the 2007 financial crisis. Design/methodology/approach This paper uses two samples. The first contains 471 observations of 100 companies listed on the NASDAQ 100 for the period 2008-2012 and is used to examine the motivations of earnings management. The second represents 282 observations of companies listed on the NASDAQ 100 that use financial aggressiveness. The authors use a panel data model to analyze the effects of four explanatory variables (corporate governance structure, CEO compensation, CEO characteristics and audit fees) on both earnings management and financial aggressiveness levels. Findings The results of the investigation show the significant impact of corporate governance structure, CEO compensation, CEO characteristics and audit fees on reducing the earnings management and financial aggressiveness levels. Research limitations/implications The findings can be valuable to both investors and researchers. For researchers, the present work may help in explaining the motivations of earnings management and financial aggressiveness practices used by large American firms after the 2007 US financial crisis. For investors, this study serves to highlight the critical importance of corporate governance, CEO compensation and CEO characteristics in limiting such behaviors. Thus, investors are recommended to account for such variables in order to make effective investment decisions. As an extension to this study, researchers might consider other CEO psychological variables. Other market indices could also be considered in order to generalize and validate the results of the research. Practical implications Investors must take into consideration the corporate governance structure and ask for supplementary information about CEO characteristics to ensure better investment decisions. Originality/value In this paper, and in contrast to previous research, the authors test the impact of corporate governance structure, CEO compensation, CEO characteristics and audit fees together on the level of both earnings management and financial aggressiveness behavior for large US non-financial firms after the 2007 financial crisis. The authors show that older CEOs use less earnings management and financial aggressiveness. The findings can be valuable to investors, managers and regulators because they have implications for their interactive decision-making process.

scholarly journals Earnings Management and Corporate Governance Evidence from Jordanian Banks

2020 ◽  
Vol 8 (5) ◽  
pp. 1724-1731
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Earnings Management ◽  
Board Of Directors ◽  
Discretionary Accruals ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Developed Markets ◽  
Governance Practices ◽  
The Board Of Directors

The board of directors typically selects and removes officers, initiates fundamental changes, determines capital structure, adds, amends, or repeals bylaws (such as mergers and divestitures), declares dividends and sets the compensation for officers and management. The segregation of duties involves assigning different employees to perform functions so that an employee acting alone is prevented from committing an error or concealing a fraud in the normal course of their duties. Four types of functional responsibilities should be segregated: the authority to execute transactions, the recording of transactions, custody of the assets affected by the transactions and periodic reconciliation of existing assets to recorded amounts. There are several studies on the influence of corporate governance in developed markets relating to a variety of aspects. However, in the context of the Jordan market, such researches are rare. The paper analyses the governance practices of 13 Jordanian listed banks listed. The main findings of the study are that there is a positive relationship between board sizes and earnings management (EM) through discretionary accruals, that there is no relationship between independence and segregation of duties, and that EM through discretionary accruals and board size mediates the association between corporate governance structure and (EM) through discretionary accruals.

CORPORATE GOVERNANCE IN THE 19TH CENTURY: EVIDENCE FROM THE CHESAPEAKE AND OHIO CANAL COMPANY

2009 ◽  
Vol 36 (2) ◽  
pp. 113-137 ◽  
Author(s):  
Robert W. Russ ◽  
Gary John Previts ◽  
Edward N. Coffman
Keyword(s):  
Corporate Governance ◽  
19Th Century ◽  
Annual Report ◽  
Governance Structure ◽  
Review Committee ◽  
Corporate Governance Structure ◽  
Theoretical Structure ◽  
The 19Th Century ◽  
The U.S

Presenting evidence from a 19th century corporation, the Chesapeake and Ohio Canal Company (C&O), the paper shows that issues of corporate governance have existed since the first corporations were established in the U.S. The C&O used a stockholder review committee to review the annual report of the president and directors. The paper shows how the C&O stockholders used this committee to supplement the corporate governance structure. The corporate governance structure of the C&O is also viewed from a theoretical structure as espoused by Hart [1995].

THE STOCKHOLDER REVIEW COMMITTEE OF THE CHESAPEAKE AND OHIO CANAL COMPANY, 1828–1857: EVIDENCE OF CHANGES IN FINANCIAL REPORTING AND CORPORATE GOVERNANCE

2006 ◽  
Vol 33 (1) ◽  
pp. 125-143 ◽  
Author(s):  
Robert W. Russ ◽  
Gary J. Previts ◽  
Edward N. Coffman
Keyword(s):  
Corporate Governance ◽  
19Th Century ◽  
Financial Reporting ◽  
Financial Management ◽  
Governance Structure ◽  
The Political ◽  
Review Committee ◽  
Corporate Governance Structure ◽  
Corporate Form ◽  
The 19Th Century

Canal companies were among the first enterprises to be organized in the corporate form and to require large amounts of capital. This paper examines the stockholder review committee of a 19th century corporation, the Chesapeake and Ohio Canal Company (C&O), and discusses how the C&O used this corporate governance structure to monitor and improve financial management and operations. A major strength was the concern and dedication of the stockholders to the company, while a major weakness was the political control exerted by the State of Maryland. The paper provides an historical perspective on corporate governance in the 19th century. This research contributes to the literature by providing detailed workings and practices of a stockholder review committee. The paper documents corporate governance efforts in archival sources that provide an early example of accountability required in a corporate charter and the manner in which the stockholders carried out this responsibility.

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