Article: Does corporate governance curb earnings management? A moderated meta-analysis Journal: International Journal of Corporate Governance (IJCG) 2025 Vol.15 No.2 pp.197 - 233 Abstract: The current study explores the dynamics of earnings management (EM) and corporate governance by addressing the inconsistencies in the current literature concerning this association. Findings from 108 studies were used for meta-analysis to explore the effect of corporate governance on EM. Additionally, moderation analysis was conducted to investigate the effect of country's economic status, timeframe, models employed to capture EM and country's culture in the stated context. Through a synthesis of empirical studies, we discuss the discrepancy pertaining to the effect of CEO duality; executive compensation; board independence; board size; women on board; audit committee independence; institutional, family and foreign holdings in the firm equity on EM. We observed that EM and corporate governance are associated; and the country's economic status, models employed to capture EM and country's culture moderate this relationship. Current work also overcomes the gaps in previous meta-analysis studies by covering the widened time frame, additional corporate governance variables and contextual moderators. Evidence backed by standardising empirical results helps policymakers and stakeholders who are engaged in monitoring activities of the firm. Inderscience Publishers - linking academia, business and industry through research

Title: Does corporate governance curb earnings management? A moderated meta-analysis

Authors: Sangita Choudhary; Mohit Verma

Addresses: Finance and Accounting Area, Indian Institute of Management Raipur, Chhattisgarh, India ' Indian Institute of Management Sambalpur, Odisha, India; Centre for Advancing Research in Management and Law, JGLS, O.P. Jindal Global University, Sonipat, Haryana, India

Abstract: The current study explores the dynamics of earnings management (EM) and corporate governance by addressing the inconsistencies in the current literature concerning this association. Findings from 108 studies were used for meta-analysis to explore the effect of corporate governance on EM. Additionally, moderation analysis was conducted to investigate the effect of country's economic status, timeframe, models employed to capture EM and country's culture in the stated context. Through a synthesis of empirical studies, we discuss the discrepancy pertaining to the effect of CEO duality; executive compensation; board independence; board size; women on board; audit committee independence; institutional, family and foreign holdings in the firm equity on EM. We observed that EM and corporate governance are associated; and the country's economic status, models employed to capture EM and country's culture moderate this relationship. Current work also overcomes the gaps in previous meta-analysis studies by covering the widened time frame, additional corporate governance variables and contextual moderators. Evidence backed by standardising empirical results helps policymakers and stakeholders who are engaged in monitoring activities of the firm.

Keywords: board characteristics; corporate governance; earnings management; meta-analysis; ownership structure.

DOI: 10.1504/IJCG.2025.145661

International Journal of Corporate Governance, 2025 Vol.15 No.2, pp.197 - 233

Received: 11 Jun 2024
Accepted: 29 Jan 2025
Published online: 11 Apr 2025 *

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Title: Does corporate governance curb earnings management? A moderated meta-analysis

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