Influence of board and ownership structure on earnings management: Evidence from Palestine
Jul 24, 2018
DOI:
Published in: The 8th Annual International Conference on Accounting and Finance Conference (AF 2018)
Publisher: Global Science and Technology Forum
The purpose of this study is to explore the impact of the code of corporate governance in Palestine issued in November 2009 on constraining earning management practices measured by discretionary accrual among non-bank firms listed on the Palestine Exchange (PEX). We used a panel data of from 36 non-bank firms listed on the PEX during the period between 2012 and 2016. Logistic regression analysis was performed to identify the influence of a set of board of directors’ characteristics and ownership structures and firm characteristics on the earnings management practices after controlling selected firm characteristics. Our overall findings show that, except board size, the other corporate governance mechanisms used in the study are still ineffective in constraining earnings management practices in Palestine. This suggests that policymakers have to identify possible actions that can be taken to improve the effectiveness of corporate governance.