The impact of board characteristics on earnings management
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Mahmoud Mohmad Aleqab 
, Maha Mohammad Ighnaim
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This study explores the effect of the board of directors’ characteristics on real earnings management in Jordanian non-financial companies listed on the Amman Stock Exchange. The sample size is 131 companies during the period of 2015–2017. The study uses a board of directors’ size, board members’ independence, board members’ financial experience, number of board meetings, membership in more than one board, and the ownership of board members of company shares to represent the board of directors’ characteristics. Real earnings management is measured using the Roychowdhury model (2006). A multiple regression analysis (panel data) is used to investigate the effect of the board of directors’ characteristics on real earnings management. The study found a negative and statistically significant impact for both: board members’ independence and board members’ financial experience on earnings management through real activities against the previous studies’ findings, this research measured the impact of real activities. On the other hand, the study did not find any statistically significant effect of the additional earnings management variables through actual activities.
Keywords: Board Characteristics, Earnings Management, Real Activities, Amman Stock Exchange
Authors’ individual contribution: Conceptualization — M.M.A.; Methodology — M.M.A.; Software — M.M.A. and M.M.I.; Validation — M.M.A. and M.M.I.; Formal Analysis — M.M.I.; Investigation — M.M.A. and M.M.I.; Resources — M.M.A. and M.M.I.; Data Curation — M.M.A. and M.M.I.; Writing — Original Draft — M.M.A. and M.M.I.; Writing — Review & Editing — M.M.A.; Visualization — M.M.A.; Supervision — M.M.A.; Project Administration — M.M.A.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G34
Received: 17.01.2021
Accepted: 02.07.2021
Published online: 06.07.2021
How to cite this paper: Aleqab, M. M., & Ighnaim, M. M. (2021). The impact of board characteristics on earnings management. Journal of Governance & Regulation, 10(3), 8–17. https://doi.org/10.22495/jgrv10i3art1
