Earnings management and board characteristics: Evidence from an emerging market

• Autor(a) principal: Luís, Tiago Filipe Pereira
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/29914
• topic: Earnings management; Discretionary accruals; Corporate Governance; Board of directors; Emerging markets; Manipulação de resultados; Accruals discricionários; Governo das sociedades; Conselho de administração; Mercados emergentes

The main objective of this dissertation is to analyse the impact of the board of directors’ characteristics on earnings management in emerging markets, using as reference companies listed on the Indonesia Stock Exchange between 2018 and 2022, which resulted in a sample of 195 observations. The level of earnings management in these companies was calculated using the discretionary accruals method, specifically the performance model from Kothari et al. (2005). The total number of directors, the ratio of independent directors and the percentage of women on the board, as calculated in previous studies, were used to measure the characteristics of board size, independence and diversity. All the data was obtained from the Thomson Reuters DataStream database. The results obtained through multiple linear regressions indicate that the presence of women on the board of directors decreases earnings management based on accruals, as previously expected. Statistical evidence was also obtained that a higher percentage of independent directors increases the level of earnings management. However, the outcomes indicate that the size of the board of directors does not affect earnings management. The findings of this dissertation reinforce the idea that the reduction of earnings manipulation via the presence of women on the board of directors is a reality in emerging markets. On the other hand, emerging markets need regulations that fortify the autonomy of independent directors so that they can adequately exercise monitoring functions and restrict earnings management.