Abstract
Purpose: Despite a large number of regulations and standards governing the financial reporting process, earnings management is increasing at an alarming rate in organizations today. The aim of this study is to investigate the impact of board and audit committee characteristics on accruals and real earnings management practices in Pakistan. Design/Methodology/Approach: Earnings management as dependent variable is measured by using two model: Kothari et al., (2005) and Roy chowdhury (2006). Whereas, board size, board independence, CEO duality, audit committee size, audit committee independence and audit committee activity are the independent variables. This study was based on data collected from 235 non-financial firms listed on Pakistan Stock Exchange (PSX) from 2008 to 2015. The relationship was investigated by means of panel data estimation. Findings: The result revealed CEO duality is positively related with accruals earnings management. Whereas, board independence is negatively related and CEO duality, board activity and audit committee independence are positively related with real earnings management. Implications/Originality/Value: The findings of the study are important for investors, regulators, and legislators in their attempt to constrain the incidence of earnings management and improve financial reporting quality
Faiza Saleem, Muhammad Yar Khan, Majid Jamal Khan. (2019) IMPACT OF BOARD AND AUDIT COMMITTEE CHARACTERISTICS ON ACCRUALS AND REAL EARNINGS MANAGEMENT IN PAKISTAN, International Journal of Management Research and Emerging Sciences, Volume 9, Issue 1.
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