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Purpose The purpose of this paper is to examine the effect of corporate governance structure and CEO compensation on the level of tax aggressiveness. Design/methodology/approach This work analyzes a sample of 471 observations of 100 companies listed on the NASDAQ 100 for the period 2008-2012. It uses a fixed-effect panel model to analyze the effect of different model variables on the tax aggressiveness level. Findings The main finding of this study is the great influence of corporate governance structure and CEO compensation on reducing tax aggressiveness. Indeed, it finds a significant negative relation between board size, CEO salary, CEO stock options and tax aggressiveness. In addition, the study reveals that there is a direct negative relation between CEO duality, tax fees and tax aggressiveness. Research limitations/implications The study was conducted using robust methods to test the effect of corporate governance structure and CEO compensation on tax aggressiveness level. The generalized least squares method was used to fit panel data and overcome heteroscedasticity and autocorrelation problems. The aim of the study was to prove the great effect of both corporate governance structure and CEO compensation on reducing tax aggressiveness. As this study was based on data from American companies, the results cannot be generalized to all contexts. Originality/value This paper differs from previous work and tests the effect of corporate governance structure, CEO compensation, CEO characteristics and audit fees on tax aggressiveness. The findings of this study will enrich the literature on tax aggressiveness by suggesting that corporate governance structure and CEO compensation can significantly limit tax aggressiveness behavior. Therefore, shareholders must be aware of these two variables. They need to limit tax aggressiveness behavior, as it is usually accompanied by rent diversion, as reported by Desai and Dharmapala (2006). Therefore, these findings will be helpful to investors, managers and regulators because they have implications for the interactive decision-making process.

Purpose The purpose of this study is to determine the effect of board effectiveness (BE) on financial performance and operational risk (OR) disclosure and the interaction effect of a bank’s Sharia Supervisory Board quality (SSB) with religious and ethical principles. Design/methodology/approach The data were collected from the annual financial reports of 25 Islamic banks (IBs) in the Gulf Cooperation Council countries over 2008-2017. The OR disclosure, the SSB quality and BE were measured using self-developed indices. The Tawhidi string relation methodology was used to establish the circular causal model. The moderating effect of the SSB quality on the performance, OR disclosure and board structure relationship was examined using the hierarchical regression analysis. Findings The main finding of this study is related to the positive moderating effect of SSB quality on the relationship between performance, OR disclosure and BE. This result seems to indicate that at a high level of SSB quality, even when the performance increase the IBs engage in complying with OR disclosure to inform the stakeholders on the real situation of the bank. Practical implications The finding of this research would be of great support to stakeholders and policymakers to make more pressure on IBs to improve the quality of their SSB structure and show more compliance with the governance recommendations. As an extension to this research, further study can examine other Islamic governance mechanisms such as Sharīʿah-compliant banks. Originality/value The present study provides a new addition to the prior literature by investigating the relationship between performance, BE, OR disclosure and the interaction effect of SSB quality. From an Islamic ethical, this research can also contribute to the growing discussion on SSB quality and performance.

Purpose The purpose of this paper is to examine the influence of earnings management (EM) and tax aggressiveness (TA) on shareholder wealth and on stock price crash risk (SPCR) of German companies. Design/methodology/approach The sample comprises 820 firm-year observations of 188 non-financial companies listed on German stock exchanges from 2008 to 2014. The authors apply generalized least square panel regression to overcome autocorrelation and heteroscedasticity problems. Findings EM and TA are not related in terms of affecting shareholder wealth and SPCR. EM has no impact on shareholder wealth but significantly affects SPCR. TA has a significant positive effect on shareholder wealth but no impact on SPCR. Thus, EM practices applied within German companies are non-opportunistic, as they do not affect shareholder wealth and decrease SPCR. TA practices are also non-opportunistic, as they increase shareholder wealth and do not affect SPCR. Research limitations/implications This study provides insights that can improve managers’ accounting choices (EM vs TA) and alleviate investor concerns about the effect of managers’ manipulation strategies. Considering other variables affecting TA, such as discretionary book tax differences, may add further insights into this discussion. The analysis of and comparison with other markets may shed more light on the validity and generalizability of the results. Practical implications This study recommends that investors must take into consideration the accounting variables to ensure better investment decisions and highlight the importance of CEO choices on market reaction. Originality/value The investigation of the mutual impact of EM and TA on shareholder wealth and SPCR is novel, and so too is the analysis of whether EM and TA are complementary or substitute for each other in this relationship.

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.