Earticle

초록

영어

This study examines how corporate governance (CG) and leverage affect real earnings management (REM) in non-financial firms listed on the Korea Composite Stock Price Index during 2003-2011 by employing corporate governance score (CGS) and total, short-term, and long-term debt ratios (i.e., leverage) as independent variables, and four REM metrics as dependent variables. We find a significant positive relationship between leverage and REM, while there is a negative effect of CG on real manipulations. We also find that firms with a high-level of CG are low-leverage firms, whose managers are less likely to conduct REM activities than those of firms with a low-level of CG. Moreover, our results reveal that CG moderates and weakens the relationship between leverage and REM. These findings are consistent with the controlling hypothesis, alignment of interest between managers and owners, and increase of the firm’s transparency and reliability, which are characteristics of firms with strong CG, whose managers reduce their opportunistic behavior and do not engage frequently in REM activities. Our study complements the literature by detecting the moderating effect of CG, which might be considered an effective mechanism to reduce and avoid REM activities.

목차

Abstract
1. Introduction
2. Development of Hypothesis
3. Empirical Design
3.1. Detecting REM
3.2. Corporate Governance Metrics
3.3. Research Model
4. Empirical Results
4.1. Descriptive Statistics
4.2. Correlation Analysis
4.3. Regression Analysis
5. Conclusion
References

키워드

저자

• Ana Belen Tulcanaza-Prieto [ Department of Business Administration, Kumoh National Institute of Technology, Gumi 39177, Korea ]
• Younghwan Lee [ Department of Business Administration, Kumoh National Institute of Technology ] Corresponding Author

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330