Corporate governance, industry-wise, earnings quality


Despite of positive impacts of the earnings management on the business purposes, many businesses have been suffered due to the audit failures as a result of aggressive earnings management. Therefore, the study on true reflection of earnings management, the controlling factors and how aggressively manipulated earnings quality can be mitigated are the areas of concern these days.

For the estimation of earnings management, performance matched discretionary accruals model has been implemented as this model has been identified as the best explanatory models. Thereafter, this research has accumulated the sector-wise earnings management to identify the impact of sectors on the sectorial earnings management. There are eleven different industries involved in the research while four of them have revealed that the managers from certain sectors have got involved in the aggressive earnings management.

Further, this research has investigated the impact of the attributes of the corporate governance on the sector-wise earnings management. the variables of corporate governance like managerial ownership, block-holders, institutional ownership and non-executive directors’ fees have significant impact on sector-wise earnings management where other variables like board meeting, board size, number of female members on the board, board independence have not been identified as they have significant impact on controlling earnings management.

Univariate and multivariate methods are used to demonstrate the results and to establish the inferences of the outcomes of the research. The use of coefficients (β  -value) and p-value are much prominent in this study.

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