The impact of board characteristics on earnings management

Abstract

This study explores the effect of the board of directors’ characteristics on real earnings management in Jordanian non-financial companies listed on the Amman Stock Exchange. The sample size is 131 companies during the period of 2015–2017. The study uses a board of directors’ size, board members’ independence, board members’ financial experience, number of board meetings, membership in more than one board, and the ownership of board members of company shares to represent the board of directors’ characteristics. Real earnings management is measured using the Roychowdhury model (2006). A multiple regression analysis (panel data) is used to investigate the effect of the board of directors’ characteristics on real earnings management. The study found a negative and statistically significant impact for both: board members’ independence and board members’ financial experience on earnings management through real activities against the previous studies’ findings, this research measured the impact of real activities. On the other hand, the study did not find any statistically significant effect of the additional earnings management variables through actual activities

Dinamika Karakteristik Dewan Perusahaan Dan Komite Audit Terhadap Manajemen Laba Riil

“…Keahlian dewan direksi dalam perusahaan dapat mengurangi praktik manajemen laba karena pengalaman keuangan yang dimiliki oleh anggota dewan bermanfaat dalam melakukan penilian aktivitas manajemen perusahaan. Dengan demikian manajemen perusahaan tidak dapat semena-mena melakukan manajemen laba karena adanya pantauan dari dewan perusahaan dengan penagalaman keuangan (Aleqab & Ighnaim, 2021). H4: Keahlian dewan direksi memiliki pengaruh terhadap manajemen laba.…”