This study examines the relationship between corporate social responsibility (CSR) reporting, board gender diversity (BGEND) and real earnings management (REM). It also investigates how the relationship between CSR reporting and REM differs between gender-diverse and non-diverse firms. Content analysis was used to measure CSR reporting. The ordinary least square regression is used to examine the relationships for a sample of 475 firm-year observations listed on the Amman Stock Exchange during 2011-2016. The results show that CSR reporting is significantly and negatively associated with REM in the Jordanian market. Nevertheless, BGEND is negatively and significantly related to REM. More importantly, the results show that BGEND moderates the CSR-REM relationship. Further,

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Purpose This study aims to investigate the monitoring role of internal audit function (IAF) on real earnings management (REM) practices. It examines the effect of investment in IAF (IIAF) and IAF sourcing arrangements on REM, unlike prior literature which has mainly examined the effects of IIAF on accrual-based earnings management. Design/methodology/approach This study uses a sample of 1,056 observations from an emerging market, Malaysia, between 2013 and 2016. Feasible generalised least square (FGLS) regression is used to analyse the data. To corroborate the results of this study, the authors use an ordinary least square (OLS) regression model with robust standard errors adjusted and also consider alternative REM measures. Findings The results of this study suggest that IIAF has a significant negative relationship with REM practices. Further, in-house IAF sourcing has a significant negative association with REM. The additional analysis supports the main results confirming the essential role of IAF in reducing REM in the Malaysian market. Practical implications The evidence relates to the important role of IAF in mitigating REM practices. High-quality of IAF impairs managers’ ability to manage earnings in their own interests. The findings may be useful in informing regulators, managers, shareholders and other investors, as well as researchers, about improving the role of IAF. Originality/value This study contributes to the existing literature by providing the first evidence of the significant role of IIAF and IAF sourcing arrangements in mitigating REM in an emerging country.

This study aims to measure the level of corporate social responsibility disclosure (CSRDL) in an emerging market, Jordan. It also aims to investigate the effect of audit committee (AC) features on CSRDL. The study’s data, obtained from annual reports, comprises 576 company-year observations from industrial and services companies listed on the Amman stock exchange for the period 2011 to 2016. Content analysis is used to measure CSRDL, and multiple regression techniques to test the proposed relationships. The results show that CSRDL among Jordanian listed companies is low, suggesting that companies have less incentive to disclose CSR practices. Additionally, AC independence and AC ownership positively influence CSRDL. The findings from this research have limited generalisability due to the specific characteristics of the sample, which is from a developing country. However, they have implications and value for policymakers and different stakeholders interested in improving CSR initiatives. The findings are also significant in reducing agency costs and enhancing corporate transparency. Within the limits of the authors’ knowledge, this research is among the first to provide preliminary evidence on the effect of AC features on CSR disclosure in an emerging market context, specifically in Jordan.

Recent studies claim that improvements in regulations and corporate governance law in different countries are restricting accrual-based earnings management and encouraging managers to shift to real earnings management (REM). However, it is not yet clear whether audit committee (AC) directors with legal expertise are associated with higher or lower REM. Thus, this study aims to investigate the relationship between the AC chair's legal expertise and REM in the energy and utilities sectors in Malaysia. The study uses a sample of all energy and utilities companies listed on Bursa Malaysia between 2013 and 2018. Ordinary least squares (OLS) regression is applied to analyse the study data. The study finds that AC chairs with legal expertise are positively and significantly associated with REM, suggesting that they have not yet ceased REM practices. The findings add to the corporate governance and earnings management literature, and inform regulators and other readers of financial reports about the monitoring role of the AC chair.

Integrated reporting (IR) is the latest topic in corporate reporting that has raised interest in the disclosure literature. Although the board’s role in IR practice has received significant attention in developed countries, this effect is still unexamined in an emerging market like Malaysia. Thus, this study sought to fill this gap in the IR literature by investigating the impact of the board of directors’ characteristics on the quantity and quality of IR disclosure. The study also examined whether the existence of a sustainability committee affects the board-IR relationship. The study used all listed companies in Bursa Malaysia that applied IR strategy from 2017 to 2020 to test the hypotheses. It employed a content analysis technique to measure the quantity and quality of IR using an index with 100 items based on the International Integrated Reporting Council guidelines. Multivariate ordinary least squares (OLS) regression was applied to examine these relationships. The analysis showed that board size, independence, gender diversity, and non-executive remuneration were positively and significantly related to greater IR disclosure, suggesting that the board of directors has a monitoring role in reducing agency problems and protecting stakeholders’ interests. However, multiple directorships did not affect IR disclosure. The analysis also showed that the presence of a sustainability committee positively affected IR disclosure, and had a moderating effect on the board-IR disclosure relationship. Our result was robust to alternative measures of the corporate board and an alternative regression model. This study is among the first to provide empirical evidence of the board and sustainability committee’s significant role in enhancing IR strategy. The findings may benefit regulatory bodies, policymakers, company managers, investors, and researchers in better understanding how directors’ characteristics influence companies’ IR practices.

PurposeThe main aim of this study is to examine the effect of investment in outside governance monitoring (IOGM), through non-executive directors' remuneration (NEDR) and external audit fees (AFEE), on real earnings management (REM) in an emerging market in the Southeast Asia region, Malaysia.Design/methodology/approachThe data comprises 1,056 observations from manufacturing companies listed on Bursa Malaysia for the four-year period, 2013 to 2016. The study tests IOGM individually and aggregately with REM. Feasible generalized least squares (FGLS) regression is used to test the hypotheses.FindingsThe results show that NEDR is negatively and significantly associated with REM. Likewise, AFEE is significantly associated with lower REM. Aggregate IOGM significantly mitigates REM. Additional tests conducted show consistent findings.Research limitations/implicationsThis evidence supports agency theory and signaling theory, that a high level of investment in governance monitoring signals a high demand for monitoring and fewer agency problems. It justifies more investment in outside scrutiny and monitoring to limit the existence of managers' opportunistic behavior in concentrated markets. This study relies on an aggregate measure of REM and focuses on manufacturing companies in Malaysia; thus, the results may not be the same using other measurements and samples.Originality/valueThe study, to the best of the researchers' knowledge, is the first to document evidence in an emerging market suggesting that higher NEDR and AFEE are individually and aggregately associated with lower REM. Policymakers, shareholders and researchers may consider investment in these two mechanisms as a proxy of high-quality monitoring that mitigates REM.

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