Audit Committee Meeting Frequency and Earnings Management Relationship: The Moderating Role of Audit Committee Multiple Directorships

This study examines the relationship between audit committee meeting frequency (ACMF) and earnings management (EM), and the moderating role of audit committee multiple directorships (PACMD). The study used 128 non- financial companies listed on the Johannesburg Stock Exchange from 2020 to 2023. A fixed-effects regression model was used to test for linear and nonlinear effects on accrual-based earnings management (AEM) and real earnings management (REM). The results show that ACMF has a curvilinear relationship with EM, with evidence that meeting frequency only begins to reduce AEM and REM after a minimum threshold is reached. Specifically, the results suggest that approximately six meetings are required before AEM declines, while REM appears to improve when meetings rise to about six to eight. This indicates that audit committee meetings are effective only beyond a certain level of engagement. The moderating analysis further shows that PACMD shapes this relationship, with graphical evidence suggesting that multiple directorships slightly strengthen ACMF's monitoring role and lower AEM and REM levels once a modest meeting threshold is reached. Although the interaction coefficients are not always statistically significant, the pattern is broadly consistent with a nonlinear moderated effect. Overall, the results support a curvilinear relationship between ACMF and EM and suggest that audit committee effectiveness depends not only on meeting frequency but also on the broader governance context in which those meetings occur. The results align with the integration of the busyness and reputation hypotheses. To this end, the results suggest that regulators should not categorise multiple directorships as unequivocally negative or positive. Rather, governance policies ought to strive for a balance between the risks associated with workload and the expertise benefits derived from the frequency of audit committee meetings to mitigate EM.