Do board characteristics mitigate real and accrual-based earnings management activities? Evidence from MENA countries

Using a sample of 915 MENA firms –year observations for the period of 2007 to 2017, we study the impact of board of directors' characteristics on accrual and real - based earnings management as measured by discretionary accruals and abnormal discretionary expense. To this end, we develop two empirical models based on ten testable research hypotheses. We find that both predictor variables – board meeting and CEO duality (partial) – are negatively associated with earnings management. While, other predictor variables, such as board size, board independence, and gender diversity, have no crucial role in alleviating earnings management. Our findings tend to confirm that an effective board director system in the Anglo Saxon may not be as effective in developing economies because of its unique characteristics of the board directors, CG system, and legal environment.