Unveiling the alliance between corporate board composition and earnings management through meta-analysis

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Amandeep Kaur, Girish Chandra Maheshwari, Archana Singh


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Misconduct in the financial sector, such as earnings management, has garnered significant attention from researchers due to the peculiarities of managers in financial reporting. Effective corporate boards have the potential to limit managerial opportunism in this regard. However, the existing literature yielded inconclusive results. Therefore, the present study aims to examine the influence of corporate board characteristics on earnings management through meta-analysis. The dataset comprises 72 published empirical studies with 3,66,417 firm-year observations. A two-step methodology is adopted following the PRISMA guidelines proposed by Moher et al. (2009) and the meta-analytic technique propounded by Hedges and Olkin (2014). The major findings of the study uncover that active, gender-diverse and larger corporate boards are most influential in controlling earnings management practices. Furthermore, different discretionary accrual measures, corporate governance systems, and the International Financial Reporting Standards (IFRS) adoption moderate the association between earnings management and board composition. The study provides a quantitative generalization to the inconclusive outcomes of published empirical studies from different timeframes and jurisdictions. The findings may help academicians and researchers to develop a holistic understanding of the impact of corporate boards on earnings management. This is one of the first studies to undertake a meta-analytic review of the association of board gender diversity and board activity as board characteristics with earnings management.

Keywords: Earnings Management, Discretionary Accruals, PRISMA, Board of Directors, Corporate Governance, CG, Meta-Analysis

Authors’ individual contribution: Conceptualization — A.K., G.C.M., and A.S.; Methodology — A.K.; Software — A.K.; Formal Analysis — A.K.; Writing — Original Draft — A.K.; Writing — Review & Editing — A.K., G.C.M., and A.S.; Supervision — G.C.M. and A.S.

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

JEL Classification: M10, M40, M41, M48

Received: 08.06.2023
Accepted: 29.08.2023
Published online: 31.08.2023

How to cite this paper: Kaur, A., Maheshwari, G. C., & Singh, A. (2023). Unveiling the alliance between corporate board composition and earnings management through meta-analysis [Special issue]. Corporate Ownership & Control, 20(3), 421–436. https://doi.org/10.22495/cocv20i3siart15