The Effects of Board Independence, Board Diversity and Corporate Social Responsibility on Earnings Management

Mohamad, Nor Raihan; Abdullah, Shamsul Nahar; Mokhtar, Mohd Zulkifli; Kamil, Nik Fuad Bin

doi:10.2139/ssrn.1725925

Cited by 6 publications

(3 citation statements)

References 56 publications

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“…Consequently, board independence may be negatively associated with the CSR disclosure, as supported by Cuadrado‐Ballesteros, Rodríguez‐Ariza, et al (). Garcia‐Sanchez, Cuadrado‐Ballesteros, and Sepulveda () provide evidence that independent directors disagree with disclosing CSR information since this could affect their professional reputation, especially given that they are not experts in CSR matters, as Haniffa and Cooke () and Mohamad, Abdullah, Mokhtar, and Kamil () also show. Thus, when the proportion of independent female directors on boards exceeds a certain threshold, it might be detrimental for addressing CSR matters, not only because they are categorised as the out‐group, but also because independent female directors may be perceived by their male counterparts as not having the appropriate expertise related to CSR issues.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Commitment of independent and institutional women directors to corporate social responsibility reporting

Pucheta‐Martínez

Bel‐Oms

Olcina‐Sempere

2018

Business Ethics: A Eur Rev

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This paper examines how independent and institutional women directors on boards affect corporate social responsibility (hereafter CSR) reporting. Most of the previous empirical evidence has shown a linear association between female directors and CSR disclosure, but to the best of our knowledge, no research has investigated the individual effect of independent and institutional female directors on CSR reporting. Therefore, the analysis of how the disclosure of CSR information is affected by independent and institutional women directors in a separate way merits our attention. Thus, we posit that there is a nonlinear association, concretely quadratic, between independent and institutional female directors on boards and CSR reporting. Our results demonstrate that, in line with the monitoring hypothesis, as the presence of independent and institutional women directors on boards increases, the CSR disclosure improves, but when their presence on boards reaches a tipping point (20.47% and 13.32%, respectively), CSR reporting decreases, which is consistent with the collusion hypothesis. This research contributes to the existing literature on the relationship between board gender diversity and CSR disclosure by suggesting that board structures formed by institutional and independent female directors have an effect on CSR reporting. Hence, female directors play a relevant role on boards since they may influence the CSR disclosure.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Commitment of independent and institutional women directors to corporate social responsibility reporting

Pucheta‐Martínez

Bel‐Oms

Olcina‐Sempere

2018

Business Ethics: A Eur Rev

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“…Our study used a range of control variables that may influence the association between anti-corruption disclosure and EM. In line with previous research, board diversity (Mohamad et al , 2011; Ezeani et al , 2022), the board size, board meetings (Vafeas, 2005) and board expertise (Ghafran and O'Sullivan, 2017) are used as control variables. Additionally, a set of firm-specific characteristics is used to mitigate any potential endogeneities caused by missing variables, including firm size (Khasanah and Kusuma, 2020), profitability (Ghafran and O'Sullivan, 2017), leverage (Khasanah and Kusuma, 2020) and market to book value (Gerged et al , 2021).…”

Section: Methodsmentioning

confidence: 94%

Anti-corruption disclosure quality and earnings management in the United Kingdom: the role of audit quality

Salem

Ghazwani

Gerged

et al. 2023

IJAIM

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Purpose Building upon institutional pressures on firms to deal with corruption, this study aims to investigate the association between a firm's engagement with anti-corruption disclosure quality (ACD_Q) and earnings management (EM). Also, this study examines the moderating role of audit quality in the association between ACD_Q and EM. Design/methodology/approach The authors constructed an ACD_Q index based on the 2010 UK Bribery Act and taking into account a wide range of rules on corruption and bribery, including those of the OECD, World Bank, UNCTAD, UNGC, UNCAC and GRI. Generalized method of moments and panel regression were used to examine the association between ACD_Q and EM. Findings Using a sample of 2,695 firm‐year observations of the UK’s FTSE-350 from 2008 to 2018, this study finds ACD_Q is negatively associated with EM. In addition, this negative relationship is contingent on audit committee independence and audit committee expertise. This finding is supported by additional robustness and sensitivity analysis. Practical implications The empirical evidence reiterates the crucial need for more concerted efforts to ensure corporate engagement in anti-corruption practices with a view to reducing earnings manipulations. Originality/value This study contributes to the limited evidence that investigates how ACD Q influences EM in the UK after the introduction of the UK Bribery Act in 2010. Furthermore, by considering the period from 2008 to 2019, this study investigates the potential moderating role of UK corporate governance reforms in EM reduction. In particular, to the best of the authors’ knowledge, this study assesses for the first time the moderating effect of audit committee mechanisms on the ACD Q and EM nexus.

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“…Beberapa peneliti sebelumnya Chih et al (2008), Prior et al (2008), Gargauri et al (2010), Handajani et al(2010), Mohammad et al (2011), dan Arifin et al (2012) mengungkap bahwa manipulasi laba berpengaruh positif dengan pengungkapan CSR. Namun, hal ini menimbulkan pertanyaan karena pada penelitian lain Yip et al, 2011;Hong dan Andersen 2011;Scholtens dan Kang, 2013;Kim et al, 2012;Pyo dan Lee, 2013 menyatakan bahwa perusahaan yang melakukan kegiatan CSR cenderung tidak memanipulasi laba.…”

Section: Pendahuluan 11 Latar Belakangunclassified

Penguji Manipulasi Laba Real Pada Pengungkapan Corporate Social Responsibility (Studi Empiris Pada Perusahaan Manufaktur Di Bursa Efek Indonesia)

Yateno

Sari

2016

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This study aims to examine empirically the effect of real earnings manipulation to CSR disclosure. A proxy for real earnings manipulation using models Roychowdhury (2006). CSR disclosure is measured using Corporate Social Disclosure Index (CSDI) based item reporting standard Global Reporting Initiative (GRI) are disclosed in the company's annual report. The study sample consisted of 261 manufacturing companies in 2012-2014. The results showed real earnings manipulation significant positive effect on CSR disclosure.Keywwords: Earnings Manipulation, Corporate Social Responsibility, Manufacturing Companies.

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The Effects of Board Independence, Board Diversity and Corporate Social Responsibility on Earnings Management

Cited by 6 publications

References 56 publications

Commitment of independent and institutional women directors to corporate social responsibility reporting

Commitment of independent and institutional women directors to corporate social responsibility reporting

Anti-corruption disclosure quality and earnings management in the United Kingdom: the role of audit quality

Penguji Manipulasi Laba Real Pada Pengungkapan Corporate Social Responsibility (Studi Empiris Pada Perusahaan Manufaktur Di Bursa Efek Indonesia)

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