Muhammad Ayub Khan, Waqas Bin Khidmat, Farid Ullah, Nazakat Ullah Khan


This study investigates the association between earnings management and corporate governance characteristics in the Chinese context. Chinese corporate governance system is improved in past two decades after deciding to move away from planned economy to market-oriented one. The data is collected from the Chinese A-listed firms for the period of 2008 to 2016 to investigate the impact of Board characteristics on Earnings management. Additionally, this study demonstrates if earnings management is still an issue in the Non-SOE or not?. This study finds that board size mitigates the earnings management, and board independence is not playing there due role in monitoring the top management. The board meetings are not so effective and therefore not contributing to mitigating the earnings management. CEO duality is not a big issue just like in developed countries. Furthermore, When segrgating the sample on the basis of ownership type, we find that, a board meeting is affective in SOE as compare to Non-SOE.Furthermore, board size substitutes the weak external governance mechanism and constrains Earnings management. Board meeting plays a complementary effect when external governance mechanism is strong. The findings of this study are significant for all stakeholders to analyze and to improve the board effectiveness and the financial reporting quality before making any decision.


Corporate governance; Board Composition; Earnings Management SOE; China

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