Does increased board independence reduce earnings management? Evidence from the recent regulatory reform

• Main Authors: CHEN, Xia, CHENG, Qiang, WANG, Xin
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: earnings management; corporate governance; board independence; information environment; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1385; https://ink.library.smu.edu.sg/context/soa_research/article/2384/viewcontent/SSRN_id2522695.pdf
• Institution: Singapore Management University

We examine whether recent regulatory reforms requiring majority board independence reduce the extent of earnings management. Firms that did not have a majority of independent directors before the reforms (referred to as noncompliant firms) are required to increase their board independence. We find t...