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Corporate Governance and Earnings Management: Some Evidence from Hong Kong Listed Companies
Dissertation   Open access

Corporate Governance and Earnings Management: Some Evidence from Hong Kong Listed Companies

Pok Man Kam
University of the Sunshine Coast, Queensland
Doctor of Philosophy, University of the Sunshine Coast
2007
DOI:
https://doi.org/10.25907/00572
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Abstract

audit committees CEO duality corporate governance earnings management non-executive directors
This study examines the role of various corporate governance variables in earnings management in Hong Kong during the period 2000 to 2002. The corporate governance variables examined are CEO duality (when the chairman and the CEO is the same person), the proportion of independent non-executive directors and audit committees. It also examines whether the proportion of independent non-executive directors moderates the association between CEO duality and earnings management. The findings indicate that there is a strong positive association between CEO duality and earnings management. The results suggest that there is no significant association between the proportion of independent non-executive directors on the board and earnings management. However, earnings management is significantly negatively associated with the interaction of CEO duality and the proportion of independent non-executive directors on the board, suggesting that independent non-executive directors' effectiveness in monitoring weakened the managerial behavior of earnings management in CEO duality firms. This is particularly the case in high-growth firms. The results do not show a significant association between earnings management and the existence of audit committees.

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