Board Monitoring and Earnings Management: Pre- and Post-IFRS

Posted: 3 Jan 2014

See all articles by Antonio Marra

Antonio Marra

Bocconi University - Department of Accounting

Pietro Mazzola

IULM University

Annalisa Prencipe

Bocconi University - Department of Accounting

Date Written: February 27, 2009

Abstract

In this paper, we address the question of whether the board of directors is more effective in constraining earnings management after the mandatory application of IFRS. Specifically, we explore how two board characteristics — board independence and (2) the existence of an audit committee impact earnings management. Our empirical results suggest that board independence and audit committees play an important and effective role in reducing earnings management after the introduction of IFRS and that the accounting regulatory framework significantly contributes to the effectiveness of the two corporate governance mechanisms. Our findings also confirm that a company's corporate governance characteristics remain an important determinant of earnings quality; therefore, an analysis of the effects of new regulations must consider firm-level determinants.

Keywords: Board independence; Audit committee; Earnings management; IFRS

Suggested Citation

Marra, Antonio and Mazzola, Pietro and Prencipe, Annalisa, Board Monitoring and Earnings Management: Pre- and Post-IFRS (February 27, 2009). International Journal of Accounting, Vol. 46, No. 1, 2011. Available at SSRN: https://ssrn.com/abstract=2373979

Antonio Marra (Contact Author)

Bocconi University - Department of Accounting ( email )

Via Roentgen 1
Milan, 20136
Italy

Pietro Mazzola

IULM University ( email )

Via Carlo Bo, 1
Milano
Italy
+3902891412636 (Phone)
+3902891412770 (Fax)

Annalisa Prencipe

Bocconi University - Department of Accounting ( email )

Via Roentgen 1
Milan, 20136
Italy

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