Board characteristics and earnings management. Does firm size matter?
The purpose of this paper is to extend the existing literature by empirically examining the effect of board characteristics on earnings management (EM) from a developing region perspective. The study further adds literature by examining whether firm size moderates the relationship between board char...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2022-12-01
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| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311975.2022.2088573 |
| _version_ | 1828218025769172992 |
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| author | Peter Nderitu Githaiga Paul Muturi Kabete Tirisa Caroline Bonareri |
| author_facet | Peter Nderitu Githaiga Paul Muturi Kabete Tirisa Caroline Bonareri |
| author_sort | Peter Nderitu Githaiga |
| collection | DOAJ |
| description | The purpose of this paper is to extend the existing literature by empirically examining the effect of board characteristics on earnings management (EM) from a developing region perspective. The study further adds literature by examining whether firm size moderates the relationship between board characteristics and EM. This study employs data drawn from 88 listed firms in the East African Community (EAC) for the period between 2011 and 2020. The study used the system generalized method of moments (SGMM) estimation model to take care of potential endogeneity and reverse causality. The findings revealed a positive and significant relationship between board size and EM. The findings further indicated that board independence, board gender diversity, and board financial expertise had a negative and significant effect on EM. In addition, the findings confirmed that firm size moderated the relationship between board size, board independence, board gender diversity, and EM. The insights of this study may provide useful information for shareholders and regulators in evaluating board attributes that are effective in mitigating earnings management practices from a developing region. Further, board effectiveness in deterring EM should be evaluated with regard to firm size. Just a few empirical studies have examined the relationship between board characteristics and EM in developing regions. Thus, this study contributes to the existing literature by empirically examining the topic in the EAC. Further, the study fills the existing gap in literature by examining whether firm size moderates the relationship between board characteristics and EM. |
| first_indexed | 2024-04-12T15:57:16Z |
| format | Article |
| id | doaj.art-7f63b935101741e792e77f62571a8f33 |
| institution | Directory Open Access Journal |
| issn | 2331-1975 |
| language | English |
| last_indexed | 2024-04-12T15:57:16Z |
| publishDate | 2022-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj.art-7f63b935101741e792e77f62571a8f332022-12-22T03:26:20ZengTaylor & Francis GroupCogent Business & Management2331-19752022-12-019110.1080/23311975.2022.2088573Board characteristics and earnings management. Does firm size matter?Peter Nderitu Githaiga0Paul Muturi Kabete1Tirisa Caroline Bonareri2Accounting and Finance, Moi University, Eldoret, KenyaAccounting and Finance, Moi University, Eldoret, KenyaBusiness School, Makerere University Kampala, UgandaThe purpose of this paper is to extend the existing literature by empirically examining the effect of board characteristics on earnings management (EM) from a developing region perspective. The study further adds literature by examining whether firm size moderates the relationship between board characteristics and EM. This study employs data drawn from 88 listed firms in the East African Community (EAC) for the period between 2011 and 2020. The study used the system generalized method of moments (SGMM) estimation model to take care of potential endogeneity and reverse causality. The findings revealed a positive and significant relationship between board size and EM. The findings further indicated that board independence, board gender diversity, and board financial expertise had a negative and significant effect on EM. In addition, the findings confirmed that firm size moderated the relationship between board size, board independence, board gender diversity, and EM. The insights of this study may provide useful information for shareholders and regulators in evaluating board attributes that are effective in mitigating earnings management practices from a developing region. Further, board effectiveness in deterring EM should be evaluated with regard to firm size. Just a few empirical studies have examined the relationship between board characteristics and EM in developing regions. Thus, this study contributes to the existing literature by empirically examining the topic in the EAC. Further, the study fills the existing gap in literature by examining whether firm size moderates the relationship between board characteristics and EM.https://www.tandfonline.com/doi/10.1080/23311975.2022.2088573Board characteristicsearnings managementEast African community |
| spellingShingle | Peter Nderitu Githaiga Paul Muturi Kabete Tirisa Caroline Bonareri Board characteristics and earnings management. Does firm size matter? Cogent Business & Management Board characteristics earnings management East African community |
| title | Board characteristics and earnings management. Does firm size matter? |
| title_full | Board characteristics and earnings management. Does firm size matter? |
| title_fullStr | Board characteristics and earnings management. Does firm size matter? |
| title_full_unstemmed | Board characteristics and earnings management. Does firm size matter? |
| title_short | Board characteristics and earnings management. Does firm size matter? |
| title_sort | board characteristics and earnings management does firm size matter |
| topic | Board characteristics earnings management East African community |
| url | https://www.tandfonline.com/doi/10.1080/23311975.2022.2088573 |
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