The impact of corporate governance on earnings management: Evidence from Greek listed firms

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Abstract

In this paper, we investigate whether the characteristics of boards of directors are associated with earnings management. By employing a sample of listed firms in the Athens Stock Exchange during the period from 2008 to 2016 and applying two different earnings management models (Dechow’s ’96 and DeAngelo’s ’86) to explore, via the discretionary accruals, for the presence of earnings management, we surprisingly found no evidence of almost any effect of the investigated board characteristics, except CEO duality. Besides, we also found significant variation over time. This finding confirms the unpresented effect of the sovereign debt crisis on Greek firms. The corporate governance legal framework has been improved since the mandatory adoption of the International Accounting Standards, at least from the listed firms in the Athens Stock Exchange in 2005. Under the new rules, more detailed corporate governance information is included in the firms’ financial reports during the last decade.

Keywords: Corporate Governance, Earnings Management, Greek Listed Firms

Authors’ individual contribution: Conceptualization – P.K. and S.S.; Methodology – P.K. and S.S.; Writing – S.S. and C.K.; Investigation – P.K. and S.S.; Resources – P.K., S.S., and C.K.; Supervision – P.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C30, G3, G32

Received: 30.11.2020
Accepted: 29.01.2021
Published online: 01.02.2021

How to cite this paper: Kalantonis, P., Schoina, S., & Kallandranis, C. (2021). The impact of corporate governance on earnings management: Evidence from Greek listed firms. Corporate Ownership & Control, 18(2), 140-153. https://doi.org/10.22495/cocv18i2art11