scholarly journals Board independence and earnings management – a study of listed companies on Ho Chi Minh stock exchange

2020 ◽  
Vol 3 (SI) ◽  
pp. First
Author(s):  
Doan Phuong Nhi ◽  
Nguyen Thu Hien
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Independence ◽  
Executive Directors ◽  
Current Period ◽  
The Board Of Directors ◽  
Period Performance

Board independence is reflected in many aspects, the most common of which is the existence of independent non-executive directors and the separation of Chairman and CEO roles. This study examines whether a highly independent board deters earnings management by its managers. Discretionary accruals are used to measure earnings management while current operating cash flow divided by lagged assets of current and future are used to measure manager's incentives. On a sample of 1230 observations from 244 HOSE listed companies that belong to VNX Allshare index in the period 2012-2017, this study provides significant evidence for corporate governance issues of Vietnamese listed companies. Specifically, the experimental results show that when the current period performance is poor and expected future period performance is good, and if one person holds both Chairman and CEO roles, he will carry out the transfer of a part of the future profits to the present to improve current year’s performance to satisfy personal interests. Unfortunately, all variables related to independent directors are statistically insignificant, confirming the fuzzy role of independent directors in monitoring and preventing earnings management in particular and agency problems in general. This study offers implications for the effectiveness and substance of the independent role of the board of directors in Vietnamese enterprises.

Board Independence of Listed Companies in the US and China

2018 ◽  
Vol 9 (3) ◽  
Author(s):  
Wenge Wang
Keyword(s):  
Listed Companies ◽  
Independent Directors ◽  
Board Independence ◽  
Top Management ◽  
Access To Information ◽  
Governance Mechanism ◽  
Chinese Listed Companies ◽  
The Us ◽  
Efficiency And Effectiveness

Abstract This article explores the board independence of listed companies in the US and China – an ongoing and important issue of corporate governance concerning the true independence of independent directors from management in both countries. It aims to identify what elements have an impact on board independence and examine how these influence the independence of independent directors. Four elements, independence from management; dependence on shareholders; access to information; and incentive to monitor, may have a substantial influence on board independence and align with the in-fact independence of independent directors. This article examines how and why these four elements have an impact on the effectiveness of the role of independent directors in monitoring top management and lead to independent directors failing to be truly independent of management. To support this argument, this article also investigates the efficiency and effectiveness of independent directors serving as a governance mechanism in terms of board independence in Chinese listed companies. The aim was therefore to scrutinise whether independent directors in Chinese listed companies are truly independent from management. Based on statistics calculated on data collected from CSMAR, there appears to be little evidence that independent directors serve as a governance mechanism in monitoring top management in Chinese listed companies, which thus shows that independent directors are not independent in China. The implications arising from this article are that solutions addressing the four elements that have an impact on board independence will enable independent directors to become truly independent.

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 Does the presence of independent directors reduce the practices of earnings management? The moderating role of family ownership concentration

2019 ◽  
Vol 69 (6) ◽  
pp. 638-654
Author(s):  
Deaa Al-Deen Al-Sraheen ◽  
Khaldoon Ahmad Al Daoud
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Future Research ◽  
Family Ownership ◽  
Board Independence ◽  
New Ideas ◽  
The Relationship ◽  
Moderating Role

While often criticized, the independence of directors remains a crucial criterion for evaluating the effectiveness of the monitoring role of boards. This study examines the relationship between board independence and earnings management, paying attention to moderation role of family ownership concentration on this relationship using a sample of services companies listed on Amman Stock Exchange ASE. This study documented a significant and negative association between board independence and earnings management. In addition, the moderating role of family ownership concentration on this relationship was also negative. Thus, the board’s monitoring function was inefficient due to the concentration of ownership. These results were obtained through using multiple and sequential regression analysis for the research data from 2013 to 2016. This study provides new ideas for future research such as examining the impacts of the migration of capitals and investors from neighbouring countries such as Syria and Iraq.

CFO/CEO-Board Social Ties, Sarbanes-Oxley, and Earnings Management

2011 ◽  
Vol 25 (3) ◽  
pp. 537-557 ◽  
Author(s):  
Gopal V. Krishnan ◽  
K. K. Raman ◽  
Ke Yang ◽  
Wei Yu
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Social Ties ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Board Independence ◽  
Sarbanes Oxley ◽  
Time Period ◽  
The Board Of Directors

SYNOPSIS Prior research suggests that the efficacy of a formally independent member of the board of directors could be undermined by social ties with the CEO. In this study, we examine the relation between CFO/CEO-board social ties and earnings management over the 2000–2007 time period. Our results suggest that CFOs/CEOs picked more socially connected directors in the post-Sarbanes-Oxley Act (SOX) time period (possibly as a way out of the mandated independence requirements). Our results also suggest a positive relation between CFO/CEO-board social ties and earnings management. Still, the increase in managerial/board risk aversion since SOX appears to have negated the effect of social ties on earnings management in the post-SOX period. Board independence and financial reporting quality remain topics of ongoing interest. The study is important in advancing our understanding of the role of social ties in earnings management.

The Effect of the Presence ofAudit Committees on Earnings Management in Morocco

2017 ◽  
Vol 13 (4) ◽  
pp. 225 ◽  
Author(s):  
Mohamed Yassine El Haddad ◽  
Zakaria Ez-Zarzari
Keyword(s):  
Earnings Management ◽  
Stock Price ◽  
Audit Committee ◽  
Stock Exchange ◽  
Listed Companies ◽  
Audit Committees ◽  
Accurate Information ◽  
Industry Sectors

Our paper will try emphasizing the effect of the presence of audit committees on earnings management within the Moroccan context, and most specifically in the companies listed in the Casablanca stock exchange. We have adopted previous research embedded in the Dechow, Sloan and Sweeny (1995) model of earnings management that requires a maximum of 6 companies by sector, a condition that limited our sample to 27 companies dispatched only on 4 industry sectors. Given that the companies manipulate the accruals to show the increasing results or to maintain the stock price, the role of the audit committee is to ensure that this manipulation is to be reduced in order to provide investors with accurate information. In the Moroccan context, this reduction started appearing in 2014. The years 2011, 2012 and 2013 were marked by a preparation of implementation tools of these committees mainly the integration of independent administrators within the administrative boards. However, due to lack of data, this study might be limited given the fact that the year 2016, which represented a year where the listed companies should have created an audit committee, was not covered by our study.

scholarly journals The association between corporate governance and earnings management: The role of independent directors

2006 ◽  
Vol 3 (4) ◽  
pp. 65-75 ◽  
Author(s):  
Mark Benkel ◽  
Paul R. Mather ◽  
Alan Ramsay
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Empirical Evidence ◽  
Audit Committee ◽  
Independent Directors ◽  
Corporate Governance Codes ◽  
The Board Of Directors ◽  
The Relationship

The agency perspective of corporate governance emphasizes the monitoring role of the board of directors. This study is concerned with analyzing whether independent directors on the board and audit committee (recommendations of the ASX Corporate Governance Council, 2003) are associated with reduced levels of earnings management. The results support the hypotheses that a higher proportion of independent directors on the board and on the audit committee are associated with reduced levels of earnings management. The results are robust to alternative specifications of the model. This study adds to the very limited research into the relationship between corporate governance and earnings management in Australia. It also provides empirical evidence on the effectiveness of some of the regulators’ recommendations, which may be of value to regulators in preparing and amending corporate governance codes

scholarly journals The Greek paradigm of corporate governance and board of directors

2021 ◽  
Vol 3 (2) ◽  
pp. 8-19
Author(s):  
Chryssoula E. Tsene
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Listed Companies ◽  
Executive Directors ◽  
Remuneration Policy ◽  
The Board Of Directors ◽  
Internal And External Factors ◽  
Internal Fit ◽  
Clear Description

Corporate governance encompasses a multidisciplinary approach, which includes the internal and external factors that affect the interests of a company’s stakeholders. The Greek corporate governance framework of listed companies has initially been established in accordance with EU regulation and soft law recommendations, in order to enhance board accountability and transparency, empower shareholders’ activism and promote financial disclosure. In that regard, it has recently been reformed by the provisions of Law 4706/2020, aiming mainly: to empower the strategic and supervisory role of the board of directors, by introducing a clear description of the obligations of non-executive and independent non-executive directors and by including the establishment of an “adequacy (internal fit-and-proper) policy” for the appointment of board members. Accordingly, two new compulsory committees are added, the nomination and the remuneration committee, which should entirely be composed by non-executive members and are invested with an advisory role in determining the remuneration policy and proposing board candidates. Furthermore, the adoption of a Corporate Governance Code is rendered substantial for all listed companies. These provisions illustrate specifically the reform of the internal corporate governance structures, which should be implemented having regard to the general principles of transparency and proportionality

scholarly journals The Effect of Ownership Structure and Board Independence Towards Overinvestment Behavior of Family Firm in Indonesia

2020 ◽  
Author(s):  
Novihana Noor Pradita ◽  
Cynthia Afriani Utama
Keyword(s):  
Board Of Directors ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Independent Directors ◽  
Family Ownership ◽  
Board Independence ◽  
Controlling Shareholders ◽  
Personal Benefit ◽  
Concentrated Ownership ◽  
The Board Of Directors

Firms with concentrated ownership structures are commonly found in Southeast Asia. In Indonesia, the biggest control of the firm comes from the family. Concentrated ownership can lead to agency problem between controlling shareholders and non- controlling shareholders where, controlling shareholders together with management, can make decisions which bring personal benefit at the expense of non-controlling shareholders for example by investing on projects with negative NPV or known as overinvestment. This study explains the effect of the presence of directors and independent commissioners on relationship between family ownership and overinvestment. Using firms listed on Indonesia Stock Exchange from 2011 to 2017 as research samples, the presence of independent director is negatively related to overinvestment. From the regression results, only independent directors were found to have a moderating effect in weakening the positive relationship between family ownership and overinvestment. This effect is seen more clearly if family ownership  in the company is low. This is because if family ownership in the company is low the process of selecting a board of directors can be more objective so that the possibility of a number of independent directors sitting on the board of directors is much greater. Thus the effect of moderation by independent directors will be greater in companies with lower family ownership. Keywords: ownership structure, board independence, overinvestment, corporate governance, Indonesia

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.

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