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Corporate Governance and Earnings Management: A Model and Empirical Investigation from Karachi Stock Exchange

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  • Marina Afzal, Muhammad Danish Habib

    (University of Gujrat, Pakistan)

Abstract

This study seeks to probe into the relationship between Corporate Governance (CG) and Earnings Management (EM). To fulfill the objective of the study, a panel data approach by considering the data of seventy four (74) non-financial firms listed at Karachi Stock Exchange (KSE) for the time period of nine years from 2005 to 2013 have been taken. Earnings management is calculated through discretionary accruals as a proxy by using Modified Jones Model. Panel data is analyzed for correlation analysis, assumptions of regression and Random-effects GLS regression by using STATA 13. In general results are in favor of the propositions that effective corporate governance polices restrict EM practices. The empirical findings of the present paper contain some relevant policy implications.

Suggested Citation

  • Marina Afzal, Muhammad Danish Habib, 2018. "Corporate Governance and Earnings Management: A Model and Empirical Investigation from Karachi Stock Exchange," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 3(2), pages 51-67, October.
    • Handle: RePEc:gei:jnlfer:v:3:y:2018:i:2:p:51-67
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