Female Directors and Earnings Management: Evidence from UK Companies
Posted: 13 Apr 2015
Date Written: January 1, 2015
Since the gender diversity of boards and reporting of earnings are two most debated issues in the corporate world, the paper examined how the presence of women directors on the corporate board influence earnings management practices. We found that firms with a higher number of female and independent female directors are adopting restrained earnings management practices in the UK. We further made a distinction between high and low debt firms, and the outcomes reveal that female directors have a positive effect on the earnings management in low debt firms. The paper contributes to the debate on gender diversity on boards, and its impact on the use of accounting discretion in financial reporting.
Keywords: Earnings Management, Female Directors, UK
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