Board characteristics effect on earning management: Evidence from a panel data model on Taiwanese firms

Abstract

 This report examines the effect of board characteristics on earnings management based on the sample of 670 Taiwanese firms over a 3-year period, from 2008 until 2010. Applying random-effect panel data model, this report finds that the presence of independent non-executive director will mitigate discretionary accruals while the state of CEO duality exacerbates earnings management. Besides earnings management also increase whenever firm’s CEO owns this firm’s stock.