Title: Do board and audit characteristics affect earnings management in times of Covid-19?

Authors: Ahmed Imran Hunjra; Fitim Deari; Rashid Mehmood; Mamdouh Abdulaziz Saleh Al-Faryan

Addresses: IPAG Business School, Chair "Towards an Inclusive Company", Paris, 75001, France ' Faculty of Business and Economics, South East European University, 1200 Tetovo, Republic of North Macedonia ' UE Business School, Division of Management and Administrative Science, University of Education, Lahore, 42000, Pakistan ' Faculty of Business and Law, School of Accounting, Economics and Finance, University of Portsmouth, Portsmouth, UK; Consultant in Economics and Finance, Riyadh, Saudi Arabia

Abstract: An effective board of directors and audit characteristics play an important part in transparency in financial information. We investigate the impact of board and audit characteristics on earnings management of banks in South Asia. We obtain data from the Data Stream of 109 listed banks of the four South Asian countries for the time spanning from 2010 to 2021. We apply the fixed effect regression model and generalised method of moments (GMM) to analyse the results. We discover that the size and board meeting frequency have a substantial negative impact on earnings management. Additionally, audit characteristics like quality of audits, size and activity of the audit committee have a negative impact on earnings management. While CEO duality has a positive impact on earnings management in selected South Asian banks. Our study is useful for management to be aware of their aggressive policies and outcomes of manipulations in earnings.

Keywords: corporate governance; audit characteristics; board characteristics; earnings management; banks; South Asian countries.

DOI: 10.1504/IJAAPE.2025.144896

International Journal of Accounting, Auditing and Performance Evaluation, 2025 Vol.21 No.1/2, pp.18 - 41

Received: 13 Jan 2023
Accepted: 29 Mar 2023
Published online: 07 Mar 2025 *