UUM Electronic Theses and Dissertation
UUM ETD | Universiti Utara Malaysian Electronic Theses and Dissertation
FAQs | Feedback | Search Tips | Sitemap

The effectiveness of corporate governance on real earnings management in selected Malaysian companies

Olayemi, Badru Bazeet (2013) The effectiveness of corporate governance on real earnings management in selected Malaysian companies. Masters thesis, Universiti Utara Malaysia.

[thumbnail of s809965.pdf]

Download (1MB) | Preview
[thumbnail of s809965_abstract.pdf]

Download (663kB) | Preview


The practice of real earnings management occurs at companies where investors’ protection is
high and stringent corporate governance measures are put to place. The study examines the relationship between corporate governance attributes and real earnings management. In this study real earnings management is measured using three proxies, abnormal discretionary expenses, abnormal production cost, and abnormal cash flow from operations. The corporate governance attributes examined are board structure characteristics and audit committee characteristics. The sample consist of top 100 companies rated high based on Malaysia Corporate Governance Index 2011 (MCG Index) on best practices of corporate governance. Financial companies are excluded
resulted to a final sample of 78 companies. The relationships of board structure and audit
committee are tested using Ordinary Least Square regression. The results reveal that certain corporate governance variables are effective in constraining real earnings management activities. The findings of the hypothesised variables, board structures and audit committee. The study find that only board size and directors expertise constrain earnings management, but none of the audit committee variables show significant relationship with real earnings management. It can be conclude that board size and directors expertise are constraining factors in constraining real
earnings management. The finding of the study is important for market participant and policy
makers in defining effective corporate governance mechanism that could address the issue of real earnings management

Item Type: Thesis (Masters)
Supervisor : Ahmad Zaluki, Nurwati Ashikkin
Item ID: 5062
Subjects: H Social Sciences > HF Commerce. > HF5549-5549.5 Personnel Management. Employment
H Social Sciences > HG Finance
Divisions: Othman Yeop Abdullah Graduate School of Business
Date Deposited: 22 Oct 2015 01:11
Last Modified: 01 Feb 2023 06:34
Department: Othman Yeop Abdullah Graduate School of Business
Name: Ahmad Zaluki, Nurwati Ashikkin
URI: https://etd.uum.edu.my/id/eprint/5062

Actions (login required)

View Item
View Item