Show simple item record

dc.contributorRees, Lynn
dc.creatorLai, Liona Hoi Yan
dc.date.accessioned2006-10-30T23:29:05Z
dc.date.accessioned2017-04-07T19:52:19Z
dc.date.available2006-10-30T23:29:05Z
dc.date.available2017-04-07T19:52:19Z
dc.date.created2005-08
dc.date.issued2006-10-30
dc.identifier.urihttp://hdl.handle.net/1969.1/4307
dc.description.abstractThis study examines whether board independence is an effective corporate governance mechanism in reducing earnings management in China, a country with significantly different institutional and legal characteristics from the Anglo-Saxon countries. I investigate: (i) whether voluntary adoption of board independence prior to the China Regulatory Securities Commission (CSRC) regulation on board independence is associated with lower earnings management; and (ii) the extent to which the CSRC regulation is effective in achieving the aim of inhibiting earnings management. I employ two stage least squares techniques to control for potential simultaneity problems between earnings management and board independence and documents that failing to control for such problems will lead to biased and inconsistent estimates. Using three different measures of earnings management, I show that firms that voluntarily move towards board independence (i) have lower levels of discretionary accruals; (ii) employ less severe income smoothing strategies; and (iii) are less likely to manage return on equity to meet regulatory thresholds. In contrast, firms adopting board independence following the CSRC regulation in 2002 do not experience any changes in the levels of earnings management before and after the regulation. These results suggest that regulation alone is not a sufficient solution to motivate effective independent boards.
dc.language.isoen_US
dc.publisherTexas A&M University
dc.subjectEarnings Management
dc.subjectIndependent Directors
dc.subjectChina
dc.titleAre independent directors effective in lowering earnings management in China?
dc.typeBook
dc.typeThesis


Files in this item

FilesSizeFormatView

There are no files associated with this item.

This item appears in the following Collection(s)

Show simple item record