A study on the impact of corporate governance on earnings management and stock price of select publicly listed companies in the Philippines for the years 2011 to 2015

• Main Authors: Imperial, Marco, Lim, Lance, Rosario, Kevin, Viray, Jomel
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Corporate governance > Philippines; Earnings management > Philippines; Stocks > Prices > Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7155
• Institution: De La Salle University

This study focuses on the impact of corporate governance (CG) on earnings management (EM) and stock price (SP). With numerous literatures focusing on these concepts on an individual level, this study aims to determine the relationship between these concepts. Through the use of different theories as lenses of analysis, a deeper understanding of CG and its impact on EM and SP is achieved. The researchers broke down CG into nine attributes-- ownership concentration, CEO dominance, board size, board independence, audit committee independence, audit committee competence, independent director's ownership, managerial ownership, and debt reliance. EM is quantified using the modified Jones (1995) model, and SP is quantified using a ten-day average (Teker & Yuksel, 2014) beginning from the date of the release of the firm's annual report. Using corporate disclosures of select publicly listed companies in the Philippine Stock Exchange from 2011 to 2015, this study found that all the different internal control mechanism of CG are insignificant in relation to EM. On the other hand, ownership concentration and board size are found to have a significant relationship to SP.