Title: Earnings management and corporate governance: the Ghanaian experience

Authors: Afua Ataa Boakyewaa Agyekum; Francis Aboagye-Otchere; Ibrahim Bedi

Addresses: GIMPA Business School, Accra, Ghana ' University of Ghana Business School, Accra, Ghana ' University of Ghana Business School, Accra, Ghana

Abstract: Though a number of studies have been carried out in corporate governance and also on companies listed on the Ghana Stock Exchange, this paper is the first in the country that considers the relationship of Corporate Governance (CG) in relation to Earnings Management (EM). It increases the understanding of EM and its relationship with CG of listed firms. The study used the cash flow approach and the modified Jones model in estimating total accruals discretionary accruals (measure of earnings management). It also employed a panel regression analysis to determine the relationship between earnings management and corporate governance of 14 listed companies from 2002 to 2006. The results indicate an increasing trend of EM for the listed companies. It also shows a significant relationship between some CG attributes such as board size and board independence and EM.

Keywords: corporate governance; earnings management; board size; board independence; firm size; Ghana; Big 4 auditors; listed firms; listed companies; cash flow; modified Jones model; total accruals; discretionary accruals; panel regression analysis.

DOI: 10.1504/IJMP.2014.065229

International Journal of Management Practice, 2014 Vol.7 No.4, pp.309 - 323

Published online: 16 Oct 2014 *

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