Corporate governance mechanisms and earnings management: The moderating role of female directors

Mensah, Emmanuel; Boachie, Christopher

doi:10.1080/23311975.2023.2167290

Cited by 16 publications

(8 citation statements)

References 88 publications

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“…The second trend is associated with the impact of women on boards on earnings, risk, and management (Bogdan et al 2022;Elzahar et al 2022;Guizani and Abdalkrim, 2022;Huang and Mirza, 2023;Huang and Kisgen, 2013;Levi et al 2014;Ma et al 2022;Mensah and Boachie, 2023;Neuberger et al 2023;Pucheta-Martínez et al 2016, 2018Pucheta-Martínez and Bel-Oms, 2019;Sattar et al 2022;Shauki and Oktavini, 2022;Zalata et al 2022). For example, Pucheta-Martínez et al (2016, 2018 revealed that having female institutional directors on boards can increase firm value, but if their representation exceeds a particular threshold, it may lead to a decline in firm performance.…”

Section: Background Literaturementioning

confidence: 99%

Board gender diversity and cost of debt financing: Evidence from Latin American and the Caribbean firms

Gonzalez‐Ruiz,

Marín‐Rodríguez,

Peña

2023

J Corp Accounting Finance

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This research examines the relationship between board gender diversity and the cost of debt financing in Latin American and Caribbean firms. We implement the Fuzzy Logistic Autoencoder model, using data for 470 firms spanning 2016–2021 from the Eikon Refinitiv Thomson Reuters database. Our findings suggest that the variables independent board, policy board diversity, sustainable development goal 5, executive gender diversity, and governance consistently demonstrated effects on reducing the short‐term and long‐term debt cost over the period analyzed. Consequently, the potential benefits of including women on the board of directors are conducive to improving the firm's reputation, which materializes in reducing the cost of debt. The results offer valuable insights to researchers and investors seeking to understand the role of BGD composition within firms and its financial impact.

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Section: Background Literaturementioning

confidence: 99%

Board gender diversity and cost of debt financing: Evidence from Latin American and the Caribbean firms

Gonzalez‐Ruiz,

Marín‐Rodríguez,

Peña

2023

J Corp Accounting Finance

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“…The effective functioning of corporate governance can be achieved by the application of accountability, responsibility, fairness, and transparency (Indarto & Ghozali, 2016). A review of existing literature provides a substantial body of evidence supporting the effectiveness of corporate governance in overseeing earnings management practices (Azzam, 2020;Chatterjee & Rakshit, 2023;Mangala & Singla, 2023;Mensah & Boachie, 2023;Mersni & Ben Othman, 2016;Naz et al, 2023). Moreover, Mangala and Singla (2023) emphasised that corporate governance significantly enhances accounting quality and the transparency of financial information.…”

Section: Introductionmentioning

confidence: 99%

Corporate Governance And Real Earnings Management: Evidence From Indonesian Fraudulent And Non-Fraudulent Listed Companies

2024

APMAJ

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Corporate governance mechanisms provide a framework to mitigate managerial misbehaviour, including the manipulation of earnings. Despite their intended functions, the persistence of earnings management practices remains, ultimately contributing to instances of financial reporting fraud. Thus, this study aimed to examine how corporate governance attributes may affect the occurrence of earnings management, in particular real earnings management among Indonesian fraudulent and non-fraudulent listed companies. Using 192 firm-year observations, in the span of 2012-2021, the findings showed that educational background of the board of commissioners and board of directors significantly affected real earnings management practices. Nevertheless, this study failed to find a significant relationship between real earnings management and other corporate governance attributes, including changes in the board of commissioners (BOC), changes in the board of directors (BOD), the independence of BOC, the size of the audit committee, and the occurrence of auditor change. The findings of this study provide preliminary evidence on the importance of board education to influence real earnings management practices.

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“…Although, previous literature provides evidence of how board characteristics influence EM practices in large enterprises (Abdou et al , 2021; Alves, 2023; Chatterjee and Rakshit, 2023; Chee and Tham, 2021; Cho and Chung, 2022; Cornett et al , 2009; Elsheikh et al , 2023; Goel and Kapoor, 2022; Liu and Lu, 2007; Mensah and Boachie, 2023; Mensah and Onumah, 2023; Musa et al , 2023; Prencipe and Bar-Yosef, 2011; Widagdo et al , 2022; Roy and Alfan, 2022; Sáenz González and García-Meca, 2014; Sehrawat et al , 2019; Sultana et al , 2017) and EM practices in small- and medium-sized enterprises (SMEs) (Balachandran et al , 2021; Chansarn and Chansarn, 2016; Chiu and Wei-Hua, 2020; Duarte, 2022; Gajdosikova et al , 2022; Gandía and Huguet, 2021; Höglund and Sundvik, 2016; Huang et al , 2022; Maglio et al , 2020; Martinez-Martinez et al , 2021; Park et al , 2021; Séverin and Veganzones, 2021). However, there is little research examining the link between the roles of BOD and earning management practices among SMEs (Chiu and Wei-Hua, 2020 and Maglio et al , 2020) and none specifically examines such relation among SMEs operating in the UK context.…”

Section: Introductionmentioning

confidence: 99%

Roles of board of directors and earnings management across SMEs life cycle: evidence from the UK

Hassan,

Amin,

Mostafa

et al. 2023

IJAIM

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Purpose This study aims to examine the role of the board of directors in affecting earnings management practices across small- and medium-sized enterprises (SMEs) life cycle. Design/methodology/approach Data is collected from 280 SMEs listed on the London Stock Exchange during the period of 2009–2016. Fixed effects regression analysis is used to test the hypotheses. Findings This study shows that the impact of the board of directors' roles on earnings management practices varies depending on the SMEs life cycle stage. In the introduction, growth and decline stages of SMEs, the wealth creation role of the board is negatively significant with earnings management, while the wealth protection role of the board is positively significant in the growth and maturity phases. Results suggest that the board's responsibility to create wealth deters early-stage earnings management strategies, while protecting shareholder interests, in latter stages, leads to a decrease in earnings management. Practical implications The findings suggest that corporate governance should be customized to the specific stage of the SMEs life cycle. Additionally, different life cycle stages may impose different requirements on corporate boards to shape the effectiveness of these mechanisms and constrain earnings management practices. Originality/value To the best of the authors’ knowledge, this study offers one of the first insights on the UK SMEs to understand how board functions and earnings management practices vary over SMEs life cycles. It will offer important information on the effect of board features on earnings management in SMEs in the UK and is anticipated to be of importance to policymakers, regulators, investors and practitioners.

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Corporate governance mechanisms and earnings management: The moderating role of female directors

Cited by 16 publications

References 88 publications

Board gender diversity and cost of debt financing: Evidence from Latin American and the Caribbean firms

Board gender diversity and cost of debt financing: Evidence from Latin American and the Caribbean firms

Corporate Governance And Real Earnings Management: Evidence From Indonesian Fraudulent And Non-Fraudulent Listed Companies

Roles of board of directors and earnings management across SMEs life cycle: evidence from the UK

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