The impact of corporate governance on earnings management in emerging economies : the Greek evidence

Abstract

This study tries to investigate the impact of corporate governance mechanism effects on decisions that may manipulate earnings in Greek listed firms. To do so, the board of directors and the audit committee were taken into account, together with the total accruals of 46 Greek listed firms for the years 2011–2015. For the analysis, three research hypotheses have been made to investigate where the independent members do not use earnings management tactics and if financially healthy firms try these tactics. The main finding of the study is that firms with a strong and independent board of directors combined with an active audit committee, together with financial soundness and the presence of a large audit firm, are deterred from practices related earnings management.