Influence Of Independence Of The Board Of Earnings Management

Recent study of corporate governance literature mainly focused on boardstructure can improve the supervision of the management decision-making. Priorstudies have shown that the independence of the Board, widely held listed companiesto manage earnings situation is not all over. However, there is less evidence of boardindependence of earnings management about the family-controlled companies. Thisproblem is very interesting, because these companies are prone to various types ofconcerns about the agency problem. The purpose of this study, two aspects of thefamily-controlled enterprises lower board independence and a higher risk of collusionto pay attention to earnings management. We found the family-controlled companiesare stronger than non-family-controlled companies at earnings management. In thepresent study, the independence of the Board estimated using two parameters:(1) thefrequency of meetings of the Board of Directors,(2) the size of the board,(3)independent Directors Attendance,(4) the individual dummy variables of the ChiefExecutive Officer and Chairman of the Board. Our empirical results provide evidencethat, the independence of the board of directors of the family-controlled companies onearnings management is weaker.