Board independence, corporate social responsibility, and earnings management

This study explores the impact of board independence on corporate earnings management, further introducing Corporate Social Responsibility (CSR) as a moderating variable. It systematically analyzes how board independence and the fulfillment of social responsibilities jointly influence corporate earnings manipulation. Based on panel data from non-financial listed companies on the A-share market in China from 2008 to 2024, the empirical results indicate that board independence significantly restrains corporate earnings manipulation, reflecting its supervisory effectiveness within the governance structure. Moreover, board independence can indirectly reduce the level of earnings manipulation through mechanisms such as enhancing information transparency and optimizing executive incentive structures. CSR strengthens the inhibitory effect of board independence on corporate earnings management; specifically, in companies with a higher level of social responsibility fulfillment, the constraints imposed by board independence on earnings management are more pronounced. Further heterogeneity tests show that this restraining effect is more significant in companies located in the eastern region and in those where executives possess a financial background. The findings enrich the research on the interaction mechanisms between corporate governance and earnings management and provide policy implications for enhancing corporate financial transparency and external governance effectiveness.