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Board Independence, Corporate Governance and Earnings Management in France

In: Corporate Governance


  • Ramzi Benkraiem

    (IESEG School of Management)


The financial markets increasingly look to corporate governance mechanisms to help guarantee reliable and accurate financial information. The evaluation of the effectiveness of this role is therefore an interesting empirical question. This question has been brought to the fore by recent financial scandals and made crucial by the recent changes in the French institutional context. It is from this standpoint that this chapter aims to examine the influence of the board independence and two other corporate governance mechanisms, namely the audit quality and the ownership structure, on earnings management as measured by discretionary accruals. The empirical findings show that the presence of independent directors can moderate the management of discretionary accruals. The Big 4 auditors can also limit this discretionary adjustment. However, no statistically significant relationship was observed between dispersion vs. concentration of ownership structure and these accruals. This study makes an interesting contribution by making it possible to evaluate empirically the effectiveness of the role of three important corporate governance mechanisms. It adds to the limited research into the relationship between corporate governance and earnings management in France. Thus, it should be of interest to academics as well as regulators in preparing and amending corporate governance laws.

Suggested Citation

  • Ramzi Benkraiem, 2012. "Board Independence, Corporate Governance and Earnings Management in France," Springer Books, in: Sabri Boubaker & Bang Dang Nguyen & Duc Khuong Nguyen (ed.), Corporate Governance, edition 127, pages 309-322, Springer.
  • Handle: RePEc:spr:sprchp:978-3-642-31579-4_13
    DOI: 10.1007/978-3-642-31579-4_13

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