Board of director’s attributes and earning management: Evidence from Egypt
Author(s)
Mohammed Soliman , Aiman A Ragab
Publication date 2013/1/27
Journal Proceedings of 6th International Business and Social Sciences Research Conference
Abstract
Board of directors play a vital role in controlling agency problem between shareholders and managers arise due to earnings management. This paper examines the roles of independent members on the board, chief executive officer who also serves as a chairman of the company (hereinafter called CEO duality), board size on earnings management practices. After controlling for size, leverage and growth, we found discretionary accruals as a proxy for earnings management is positively related to the existence of CEO duality, and negatively related to board size. Also, examination of the data shows that the ratio of independent board members is not significantly related to earnings management. The findings of this paper will be of interest to investors in the Egyptian stock market. This paper also provides many recommendations to the regulatory authorities in Egypt regarding ways to strengthen and reinforce the Board of Director’s Attributes of companies.
