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Advisor(s)
Abstract(s)
This work aims to analyze the impact of corporate governance characteristics on earnings management of Portuguese non-financial listed firms, for the period 2012–2016. Using panel data, we regress discretionary accruals, a proxy of earnings management, against corporate governance characteristics and control variables. The main results show that only two corporate governance variables: the independence of the board of directors and the type of corporate governance model adopted (one-tier or two-tier), and one control variable: level of indebtedness, are relevant to explain firm’s earnings management. Results show that discretionary accruals increase with the independence of the board of directors. Moreover, companies who adopt the two-tier model are less prone to increase accruals due to a greater separation of functions and supervision and an increase in the monitorization of opportunistic behaviors. Finally, this study provides evidence that a high level of indebtedness is a deterrent to earning management practices since creditors also monitor the company’s financial situation.
Description
Keywords
Corporate governance Earnings management Accruals Transparency Portugal
Citation
Lisboa I., Costa A. (2020) The Impact of Corporate Governance on Earnings Management of Portuguese Listed Firms. In: Crowther D., Seifi S. (eds) Governance and Sustainability. Approaches to Global Sustainability, Markets, and Governance. Springer, Singapore. https://doi.org/10.1007/978-981-15-6370-6_5
Publisher
Springer, Singapore