Abstract
The effectiveness and the monitoring potentials of the board are crucial parameters for the management in the decision-making process. This study investigates the effect of board characteristics on the level of earnings management in EU listed firms. The findings indicate that the oversized boards function as a restricting determinant to the level of real and accrual-based manipulations. Also, the average board tenure is negatively correlated with real earnings management measures. An additional research query of this research is whether the effect of the board characteristics is diverse in different sized firms. In smaller firms, the board size impacts the accrual-based measures positively, while in the bigger firms, there is a positive association only with real earnings management measures. Furthermore, in smaller firms, an increase in board tenure seems to facilitate the manipulations using accounting policies and limit the manipulations of real activities. Finally, the results demonstrate that CEO-chairman duality is negatively related to the level of real earnings management.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Corporate Finance and Accounting
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
