Connecting Top Management Team (TMT) Characteristics to Earning Management: Sample Companies in Saudi Arabia

This study investigates whether specific characteristics of a firm's top management team (TMT) affect the company's earnings management (EM) in Saudi Arabia. The data was collected from 163 companies listed in Saudi Arabia from 2017 to 2021. The TMT characteristics were measured using two different criteria: the academic qualifications and the management expertise of the team. Two models were used to analyze the data: the modified Jones model (1995) was used to measure accrual management, and the Kothari model (2006) was used to estimate accrual discretionary. The research findings revealed that TMT characteristics do not significantly impact EM in Saudi Arabia. According to the Kothari model approach (2006), both the academic qualifications and the management expertise did not influence EM. However, when we followed the Jones model approach (1995), the results showed that management expertise significantly and positively impacts EM. On the other hand, the academic qualifications do not seem to significantly impact EM.