The Effects of Corporate Governance Mechanisms on Earnings Management in Egyptian listed firms in the Stock Market
Author(s)
Amr E Hassan , Mohamed M Soliman , Aiman A Ragab
Abstract
In fact, the Egyptian environment is an interesting setting in which to assess the relation between corporate governance mechanisms and earnings management. It could be found that few types of research considered the association between corporate governance and earnings management, while there is no research to study this relationship in Egypt for the periods after revolutions. Thus, this research aim is achieved by conducting model to examine the impact of Board of Director, Audit Committee Existence and Ownership Structure on Earnings management. Accordingly, the research objectives are to explain the nature of the relationship between corporate governance mechanisms and earnings management in Egyptian listed firms, identify the characteristics of corporate governance that have the most effects on earnings management, analyze the motivations that may lead managers in Egyptian listed firms to engage in earnings management, and to assess the econometric power and appropriateness of various accruals-based models to detect earnings management in the context of Egyptian listed firms. To verify and validate the relationship between the research variable, the researcher used quantitative secondary data collected from the Egyptian most active listed firms (EGX 50) for a period of six years from 2012 to 2017 and analyses were performed using Eviews. Comparing the results with the previously reviewed literature, the researcher illustrates to which extent the research findings are supported and provides some recommendations by the end of the research.
