Philippine E-Journals

The Impact of Selected Corporate Governance Variables in Mitigating Earnings Management in the Philippines

Mc Reynald S. Banderlipe Ii

Discipline: Economics, Business

 

Abstract:

Given the increasing importance of corporate governance in the Philippines, this study attempts to explain the role of selected governance variables related to a company's board of directors in mitigating earnings management in the country. Using the financial statements of publicly listed companies and a modified measurement model, the findings revealed that the holding of multiple directorial positions by the independent directors, and the managerial ownership of the board are significant enough to limit the incentives for earnings management. Moreover, firm size and return on assets were identified to have explanatory significance among the controlling factors.