The relationship between good corporate governance and earnings management
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Abstract
The objective of this research was to study the relationship between good corporate governance and earnings management. The study considers corporate governance through various characteristics composed of audit committee’s size, proportion of audit committees who have expertise in finance or accounting, proportion of female audit committees, and frequency of audit committee meetings. The decoration of profit is based on the accrual items at the discretion of the management. The data were collected from a database of 452 listed companies in The Stock Exchange of Thailand during 2019, then measured profit decoration according to the Modified Jones Model. The data was analyzed using descriptive statistics and multiple regression analysis.
The results revealed that the female audit committee had a statistical significantly positive relationship at 0.05 level with discretionary accruals. While we observe a positive relationship of other characteristics relationship with earnings management. Moreover, this research will be useful for regulators to use in formulating policies to regulate listed companies in The Stock Exchange of Thailand.
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