The impact of corporate governance, product market competition on earning management practices

Shahzad Hussain; Nasir abbas; Tasneem Sajjad; Dr. SabeehUllah; Abdul Waheed

Abstract:

The current research inspects the influence of corporate governance and product market competition on earnings management practices in the emerging Pakistani economy. For this purpose, the study has analyzed a sample of 84 non-financial companies from 2010 to 2015 listed on Pakistan Stock Exchange. In order to address the issues of endogeneity among the variables of the research, dynamic GMM model has been employed for the analysis. The results show that corporate governance variable i.e. corporate board size, independent directors, board meeting and audit quality are negatively coupled with discretionary accruals. However, the institutional ownership and CEO duality have positive association with discretionary accruals. Furthermore, the product market competition is significantly and positively related with discretionary accruals. Hence, it is concluded that corporate governance and product market competition have significant influence on earnings management practices in Pakistan. This research work may help the practitioners, regulators and Government to boost the compliance of financial reports with better corporate governance mechanism which may improve consistency of financial reports

research from:

• Foundation University - Faculty of Management Sciences

Year:

2019

Type of Publication:

Article

Journal:

Journal of Managerial Sciences

Volume:

13

Number:

2

Pages:

59-83

Month:

4