DOI: 10.5176/2251-1997_AF13.81

Authors: Sohail Ahmed


This paper seeks to study the relation between board of director characteristics as a corporate governance mechanism and earnings management in the Malaysian scenario. Earnings management is measured by discretionary accruals and for estimating discretionary accruals, Modified Jones Model is used. Board of directors’ characteristics includes number of meetings, existence of outside directors, financial expertise and separation of the roles of chair and chief executive officer. In this study, the multiple linear regressions have been used. To test the hypothesis, cross-sectional and pooled data of 71 companies listed in Bursa Malaysia from 2001 to 2005 were used. The results demonstrate that financial expertise are positively related to earnings management in the Malaysian scenario.

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