The Impacts of Corporate Governance Mechanisms on Earnings Management of Companies Listed on The Stock Exchange of Thailand
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Published:
Oct 31, 2018
Keywords:
Earnings Management Corporate Governance Mechanisms; Board Characteristics
Main Article Content
Abstract
The purpose of this study is to examine the impact of corporate governance and earnings management of listed companies on the stock exchange of Thailand. The quantitative research methods were used in this research. The empirical research samples are listed companies from the stock exchange of Thailand during 2012-2016, excluding all the firms in financial institution sectors, fund sectors and rehabs sectors, and totaling 1,665 firms – year observations and the results are analyzed by multiple regressions analysis.
The research findings 1) shown that impacts of corporate governance mechanisms are directly related to board size, CEO duality and board meeting are insignificant but board Independence to enhance the significant negative impacts on earnings management (β2 = -0.049, p < 0.10).
Article Details
How to Cite
Thunputtadom, P., & Bosakoranut, S. (2018). The Impacts of Corporate Governance Mechanisms on Earnings Management of Companies Listed on The Stock Exchange of Thailand. Ph.D. In Social Sciences Journal, 8(S), 104–119. Retrieved from https://so05.tci-thaijo.org/index.php/phdssj/article/view/135827
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Research Article
Academic articles, research articles, and book reviews in the Ph.D. in Social Sciences Journal are author’s opinions, and not the publisher’s, and is not the responsibility of the Ph.D. in Social Sciences Journal Philosophy Association, Ramkhamhaeng University. (In the case that research is done on human, the researcher has to be trained in Ethics for Doing Research on Human Training and has to produce the evidence of the training).
References
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Alareeni, B., & Aljuaidi, O. (2014). The modified Jones and Yoon models in detecting earnings management in Palestine Exchange (PEX). International Journal of Innovation and Applied Studies, 9(4), 1472-1484.
Bala, H., & Kumai, G. B. (2015). Board characteristics and earns management of listed food and bevearges firms in Nigria. European Journal of Accounting, Auditing and Finance Research, 3 (8), 25-41.
Bank of Thailand. (2017). Foreign Direct Investment (FDI). Retrieved Janyuary 31, 2018, from https://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=656&language=TH [In Thai]
Berle, A., & Means, G. (1932). The modern corporation and private property. New York: Macmillan.
Black, K. (2006). Business statistics for contemporary decision making (4th ed.). New York: John Wiley & Sons.
Chekili, S. (2012). Impact of some governance mechanisms on earnings management: An empirical validation within the Tunisian market. Journal of Business Studies Quarterly, 3(3), 95-104.
Chen, X., Cheng, Q., & Wang, X. (2015). Does increased board independence reduce earnings management?: Evidence from recent regulatory reforms. Review of Accounting Studies, 20(2), 899-933.
Fodio, M. I., Ibikunle, J., & Oba, V. C. (2013). Corporate governance mechanisms and reported earnings quality in listed Nigerian insurance firms. International Journal of Finance and Accounting, 2(5), 279-286.
Imen, K. (2007). Corporate governance: Measurement and determinant analysis. Managerial Auditing Journal, 22(8), 740-760.
Jaggi, B., & Tsui, J. (2007). Insider trading, earnings management and corporate governance: Empirical evidence based on Hong Kong firms. Journal of International Financial Management and Accounting, 18(3), 92-222.
Jensen, M., & Meckling, W. (1976). Theory of the frm: Managerial behavior, agency theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance, 48(3), 831-880.
Kumar , N., & Singh, J. P. (2013). Effect of board size and promoter ownership on firm value: Some empirical findings from India Corporate Governance. The International Journal of Business in Society, 13(1), 88-98.
Leuz, C., Nanda, D., & Wysocki, P. D. (2003). Earnings management and investor protection: An international comparison. Journal of Financial Economics, 69(3), 505-527.
Lipton, M., & Lorsch, J. W. (1992). A modest proposal for improved corporate governance. Business Lawyer, 48(1), 59-77.
McColgan, P. (2001). Agency theory and corporate governance: A review of the literature from a U.K. perspective. Glasgow: University of Strathclyde, Department of Accounting & Finance.
Meiryani. (2015). Mechanism of good corporate governance earnings management on financial performance in banks listed in Indonesia Stock Exchange using path. Australian Journal of Basic and Applied Sciences, 9(23), 573-584.
Nekhili, M., Amar, I. B., Chtioui, T., & IRG, F. L. (2016). Free cash flow and earnings management: The moderating role of governance and ownership. The Journal of Applied Business Research, 32(1), 255-268.
Omoye, A. S., & Eriki, P. O. (2014). Corporate governance determinants of earnings management: Evidence from Nigerian quoted companies. Mediterranean Journal of Social Sciences, 5(23), 553-564.
Patton, A., & Baker, J. (1987). Why do directors not rock the boat? Harvard Business Review, 65(6), 10-12.
Organization for Economic Co-Operation and Development. (2004). OECD principles of corporate governance. Paris: OECD Publications Service.
Rahmawati, P. S., & Dianita , P. S. (2011). Analysis of the effect of corporate social responsibility on financial performance with earnings management as a moderating variable. Journal of Modern Accounting and Auditing, 7(10), 1034-1045.
Salihi, A. A., & Jibril, R. S. (2015). The effect of board the size and audit committee the size on earnings management in Nigerian consumer industries companies. International Journal of Innovative Research & Development, 4(3), 84-91.
Selahud in , N. F., Zak, N. B., & Sanus, Z. M. (2014). Remodelling the earnings management with the appearance of leverage, financial distress and free cash flow: Malaysia and Thailand evidences. Journal of Applied Sciences, 14(21), 2644-2661.
Stock Exchange of Thailand. (2017). Enforcement. Retrieved January, 31, 2018 from https://www.sec.or.th/TH/Enforcement/Pages/enforce_search.aspx [In Thai]
Watts, R. L., & Zimmerman, J. L. (1978). Towards a positive theory of the determination of accounting standards. The Accounting Review, 53(1), 112-134.
Yasser, Q. R., & Mamun, A. A. (2015). The impact of CEO duality attributes on earnings management in the east corporate governance. The International Journal of Business in Society, 15(5), 706-718.
Yoon, S., Miller, G., & Jiraporn, P. (2006). Earnings management vehicles for Korean firms. Journal of International Financial Management and Accounting, 17(2), 85-109.
Ahmed, S. (2013). Board of director characteristics and earnings management in Malaysia. Journal on Business Review (GBR), 2(4),94-99.
Alareeni, B., & Aljuaidi, O. (2014). The modified Jones and Yoon models in detecting earnings management in Palestine Exchange (PEX). International Journal of Innovation and Applied Studies, 9(4), 1472-1484.
Bala, H., & Kumai, G. B. (2015). Board characteristics and earns management of listed food and bevearges firms in Nigria. European Journal of Accounting, Auditing and Finance Research, 3 (8), 25-41.
Bank of Thailand. (2017). Foreign Direct Investment (FDI). Retrieved Janyuary 31, 2018, from https://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=656&language=TH [In Thai]
Berle, A., & Means, G. (1932). The modern corporation and private property. New York: Macmillan.
Black, K. (2006). Business statistics for contemporary decision making (4th ed.). New York: John Wiley & Sons.
Chekili, S. (2012). Impact of some governance mechanisms on earnings management: An empirical validation within the Tunisian market. Journal of Business Studies Quarterly, 3(3), 95-104.
Chen, X., Cheng, Q., & Wang, X. (2015). Does increased board independence reduce earnings management?: Evidence from recent regulatory reforms. Review of Accounting Studies, 20(2), 899-933.
Fodio, M. I., Ibikunle, J., & Oba, V. C. (2013). Corporate governance mechanisms and reported earnings quality in listed Nigerian insurance firms. International Journal of Finance and Accounting, 2(5), 279-286.
Imen, K. (2007). Corporate governance: Measurement and determinant analysis. Managerial Auditing Journal, 22(8), 740-760.
Jaggi, B., & Tsui, J. (2007). Insider trading, earnings management and corporate governance: Empirical evidence based on Hong Kong firms. Journal of International Financial Management and Accounting, 18(3), 92-222.
Jensen, M., & Meckling, W. (1976). Theory of the frm: Managerial behavior, agency theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance, 48(3), 831-880.
Kumar , N., & Singh, J. P. (2013). Effect of board size and promoter ownership on firm value: Some empirical findings from India Corporate Governance. The International Journal of Business in Society, 13(1), 88-98.
Leuz, C., Nanda, D., & Wysocki, P. D. (2003). Earnings management and investor protection: An international comparison. Journal of Financial Economics, 69(3), 505-527.
Lipton, M., & Lorsch, J. W. (1992). A modest proposal for improved corporate governance. Business Lawyer, 48(1), 59-77.
McColgan, P. (2001). Agency theory and corporate governance: A review of the literature from a U.K. perspective. Glasgow: University of Strathclyde, Department of Accounting & Finance.
Meiryani. (2015). Mechanism of good corporate governance earnings management on financial performance in banks listed in Indonesia Stock Exchange using path. Australian Journal of Basic and Applied Sciences, 9(23), 573-584.
Nekhili, M., Amar, I. B., Chtioui, T., & IRG, F. L. (2016). Free cash flow and earnings management: The moderating role of governance and ownership. The Journal of Applied Business Research, 32(1), 255-268.
Omoye, A. S., & Eriki, P. O. (2014). Corporate governance determinants of earnings management: Evidence from Nigerian quoted companies. Mediterranean Journal of Social Sciences, 5(23), 553-564.
Patton, A., & Baker, J. (1987). Why do directors not rock the boat? Harvard Business Review, 65(6), 10-12.
Organization for Economic Co-Operation and Development. (2004). OECD principles of corporate governance. Paris: OECD Publications Service.
Rahmawati, P. S., & Dianita , P. S. (2011). Analysis of the effect of corporate social responsibility on financial performance with earnings management as a moderating variable. Journal of Modern Accounting and Auditing, 7(10), 1034-1045.
Salihi, A. A., & Jibril, R. S. (2015). The effect of board the size and audit committee the size on earnings management in Nigerian consumer industries companies. International Journal of Innovative Research & Development, 4(3), 84-91.
Selahud in , N. F., Zak, N. B., & Sanus, Z. M. (2014). Remodelling the earnings management with the appearance of leverage, financial distress and free cash flow: Malaysia and Thailand evidences. Journal of Applied Sciences, 14(21), 2644-2661.
Stock Exchange of Thailand. (2017). Enforcement. Retrieved January, 31, 2018 from https://www.sec.or.th/TH/Enforcement/Pages/enforce_search.aspx [In Thai]
Watts, R. L., & Zimmerman, J. L. (1978). Towards a positive theory of the determination of accounting standards. The Accounting Review, 53(1), 112-134.
Yasser, Q. R., & Mamun, A. A. (2015). The impact of CEO duality attributes on earnings management in the east corporate governance. The International Journal of Business in Society, 15(5), 706-718.
Yoon, S., Miller, G., & Jiraporn, P. (2006). Earnings management vehicles for Korean firms. Journal of International Financial Management and Accounting, 17(2), 85-109.