BREAKING BARRIERS: FEMALE DIRECTORS, EARNINGS MANAGEMENT, AND THE INFLUENCE OF EDUCATION AND SUSTAINABILITY REPORTING
Abstract
Background: The role of women directors in corporate governance has received increasing attention, especially regarding their impact on earnings management. Recognizing this role is critical as companies need to increase transparency and accountability in their financial practices, while recognizing the role of sustainability.
Objective: These studies aim to find out, whether female participation in the board of directors can reduce earnings management practices, by adopting different types of measurements for the female variable.
Research Method: The applied methods are purposive sampling where 49 samples collected from Indonesia Stock Exchange (IDX) that consistently publishing financial and sustainability report with a timeframe of 2018-2022. Implementing data panel regression method using Stata application.
Result: The result indicate that, three female director can reduce earnings management, while independent commissioner and GRI disclosure are positively related to earnings management.
Originality/Novelty of Research: This studies use different kind of measurements towards female director variables, to proving applied theory are still relevant and to resolve the limitation of previous studies to find the critical effect of female directors participation to decreasing earnings management in Indonesia.
Keywords
Full Text:
PDFReferences
Abner, R. A., & Ferrer, R. C. (2019). The role of corporate social responsibility on the link of real earnings management with financial performance and firm value of publicly listed companies in the Philippines. Asia-Pacific Social Science Review, 19(2), 15–29.
Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309. https://doi.org/10.1016/J.JFINECO.2008.10.007
Almahrog, Y., Ali Aribi, Z., & Arun, T. (2018). Earnings management and corporate social responsibility: UK evidence. Journal of Financial Reporting and Accounting, 16(2), 311–332. https://doi.org/10.1108/JFRA-11-2016-0092
Anh, L. H. T., & Khuong, N. V. (2022). Gender diversity and earnings management behaviours in an emerging market: a comparison between regression analysis and FSQCA. Cogent Business and Management, 9(1). https://doi.org/10.1080/23311975.2022.2101243
Arioglu, E. (2020). The affiliations and characteristics of female directors and earnings management: evidence from Turkey. Managerial Auditing Journal, 35(7), 927–953. https://doi.org/10.1108/MAJ-07-2019-2364
Arvidsson, S. (2014). Corporate social responsibility and stock market actors: A comprehensive study. Social Responsibility Journal, 10(2), 210–225. https://doi.org/10.1108/SRJ-08-2012-0099
Baker, G. (2000). The Use of Performance Measures in Incentive Contracting. American Economic Review, 90(2), 415–420. https://doi.org/10.1257/AER.90.2.415
Barber, B. M., & Odean, T. (1998). Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment. SSRN Electronic Journal. https://doi.org/10.2139/SSRN.139415
Belaounia, S., Tao, R., Zhao, H., Belaounia, S., Tao, R., & Zhao, H. (2022). Gender equality ’ s impact on female directors ’ efficacy : A multi-country study To cite this version : HAL Id : hal-03492258 Gender Equality ’ s Impact on Female Directors ’ Efficacy : A Multi-Country Study.
Bilal, Komal, B., Ezeani, E., Usman, M., Kwabi, F., & Ye, C. (2023). Do the educational profile, gender, and professional experience of audit committee financial experts improve financial reporting quality? Journal of International Accounting, Auditing and Taxation, 53(September), 100580. https://doi.org/10.1016/j.intaccaudtax.2023.100580
Chi, G., & Gooda, A. R. (2023). Internal control, debt risk, CEO education and earnings management evidence from China. Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-05-2023-0237
Chiang, H., Lin, S., He, L., & Sung, Y. (2016). Professional education background and earnings management of chairmen and senior managers. The International Journal of Business and Finance Research, 10(2), 91–108.
Choi, H., Choi, B., & Byun, J. (2018). The relationship between corporate social responsibility and earnings management: Accounting for endogeneity. Investment Management and Financial Innovations, 15(4), 69–84. https://doi.org/10.21511/imfi.15(4).2018.06
Deegan, C. (2002). Introduction: The legitimising effect of social and environmental disclosures – a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282–311. https://doi.org/10.1108/09513570210435852/FULL/XML
Diri, M. El. (2017). Introduction to earnings management. In Introduction to Earnings Management. https://doi.org/10.1007/978-3-319-62686-4
Elzahar, H., Zalata, A., & Hassaan, M. (2022). Attributes of female directors and accruals-based earnings management. Cogent Business and Management, 9(1). https://doi.org/10.1080/23311975.2022.2139212
Fan, Y., Jiang, Y., Zhang, X., & Zhou, Y. (2019). Women on boards and bank earnings management: From zero to hero. Journal of Banking & Finance, 107, 105607.
Fathonah, A. N. (2017). Pengaruh penerapan good corporate governance terhadap financial distress. Jurnal Ilmiah Akuntansi, 1(2), 133–150. https://doi.org/10.23887/jia.v1i2.9989
Fischer, M., & Rosenzweig, K. (1995). Attitudes of students and accounting practitioners concerning the ethical acceptability of earnings management. Journal of Business Ethics, 14(6), 433–444. https://doi.org/10.1007/BF00872085
Garen, J. E. (1994). Executive Compensation and Principal-Agent Theory. Https://Doi.Org/10.1086/261967, 102(6), 1175–1199. https://doi.org/10.1086/261967
Ghaleb, B. A. A., Qaderi, S. A., Almashaqbeh, A., & Qasem, A. (2021). Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan. Cogent Business and Management, 8(1). https://doi.org/10.1080/23311975.2021.1883222
Gottschalk, P. (2006). CIO and corporate strategic management: Changing role of CIO to CEO. CIO and Corporate Strategic Management: Changing Role of CIO to CEO, 1–296. https://doi.org/10.4018/978-1-59904-423-1
Gull, A. A., Nekhili, M., Nagati, H., & Chtioui, T. (2018). Beyond gender diversity: How specific attributes of female directors affect earnings management. British Accounting Review, 50(3), 255–274. https://doi.org/10.1016/j.bar.2017.09.001
Hala, G. S. (2019). Women on boards and earnings management: What really matters? Jurnal Keuangan Dan Perbankan, 23(4), 566–578. https://doi.org/10.26905/jkdp.v23i4.3439
Hala, G. S. (2019). Women on boards and earnings management: What really matters? Jurnal Keuangan Dan Perbankan, 23(4), 566–578. https://doi.org/10.26905/jkdp.v23i4.3439
Hillman, A. J., Shropshire, C., & Cannella, A. A. (2007). Organizational predictors of women on corporate boards. Academy of Management Journal, 50(4), 941–952. https://doi.org/10.5465/AMJ.2007.26279222
Jia, N., Shi, J. and Wang, Y. (2013), “Coinsurance within business groups: evidence from related party transactions in an emerging market”, Management Science, Vol. 59 No. 10, pp. 2295-2313
Kanter, R. M.: 1977, Men and Women of the Corporation (Basic Books, New York).
Krishnan, G. V., & Parsons, L. M. (2008). Getting to the Bottom Line: An Exploration of Gender and Earnings Quality. Journal of Business Ethics, 78(1), 65–76. https://doi.org/10.1007/S10551-006-9314-Z
Kumala, R., & Siregar, S. V. (2021). Corporate social responsibility, family ownership and earnings management: the case of Indonesia. Social Responsibility Journal, 17(1), 69–86. https://doi.org/10.1108/SRJ-09-2016- 0156
Liu, F., & Maitlis, S. (2014). Emotional Dynamics and Strategizing Processes: A Study of Strategic Conversations in Top Team Meetings. Journal of Management Studies, 51(2), 202–234. https://doi.org/10.1111/J.1467-6486.2012.01087.X
Mahrani, M., & Soewarno, N. (2018). The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable. Asian Journal of Accounting Research, 3(1), 41–60. https://doi.org/10.1108/AJAR-06- 2018-0008
Maji, S. G., & Saha, R. (2021). Gender diversity and financial performance in an emerging economy: empirical evidencefrom India. Management Research Review, 44(12), 1660–1683. https://doi.org/10.1108/MRR-08-2020-0525
Miladi, E., & Chouaibi, J. (2021). The Moderating Role Of Audit Quality On The Relationship Between Women In Top Management Team And Bank Earnings Management. Academy of Accounting and Financial Studies Journal, 25(Special Issue 4), 1–14.
Nugroho, S. A., & Firmansyah, A. (2018). Pengaruh financial distress, real earnings management dan corporate governance terhadap tax aggressiveness. Journal of Applied Business Administration, 1(2), 163–182. https://doi.org/10.30871/jaba.v1i2.616
Parliament, T. H. E. E., Council, T. H. E., The, O. F., & Union, E. (2022). Directive of the European Parliament and of the Council on improving the gender balance among […] directors of companies listed on stock exchanges, and related measures. 2013(October), 44–59.
Pratiwi, R., & Yulianto, A. (2016). Pengaruh struktur kepemilikan dan komisaris independen terhadap biaya keagenan perusahaan yang masuk dalam indonesia most trusted companies. Management Analysis Journal, 5(3), 215–228. https://doi. org/10.15294/maj.v5i3.11119
Putri, B. N. L., & Rachmawati, S. (2018). Analisis financial distress dan free cash flow dengan proporsi dewan komisaris independen sebagai variabel moderasi terhadap manajemen laba. Jurnal Keuangan Dan Perbankan, 14(2), 54–61. http://journal.ibs.ac.id/index.php/jkp/article/view/127
Rahmawati, H. I. (2012). Pengaruh good corporate governance (GCG) terhadap manajemen laba pada perusahaan perbankan. Jurusan Akuntansi, Fakultas Ekonomi, Universitas Negeri Semarang, Indonesia, 2(1). https://doi.org/10.15294/aaj.v2i1.1136
Ramadhan, M. A., & Firmansyah, A. (2022). The Supervision Role of Independent Commissioner in Decreasing Risk From Earnings Management and Debt Policy. Accounting Analysis Journal, 11(1), 31–43. https://doi.org/10.15294/aaj.v11i1.58178
Saona, P., Muro, L., & Alvarado, M. (2020). How do the ownership structure and board of directors’ features impact earnings management? The Spanish case. Journal of International Financial Management and Accounting, 31(1), 98–133. https://doi.org/10.1111/jifm.12114
Sari, I. P., Tjandra, T., Firmansyah, A., & Trisnawati, E. (2021). Praktek Manajemen Laba Di Indonesia : Komite Audit ,. ULTIMA Accounting, 13(2), 310–322.
Scott, D. W. (1992). Multivariate Density Estimates.
Securities Commission. (2021). Malaysian Code on. Malaysian Code on Corporate Governance, 1–23.
Sofian, S., Dwijayanti, S. P. F., & Wijaya, H. (2020). Female in board and earnings management: Evidence in Indonesia non-financial firms. Jurnal Keuangan Dan Perbankan, 24(4), 449–462. https://doi.org/10.26905/jkdp.v24i4.4230
Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644
Tannaya, C. I. N., & Lasdi, L. (2021). Pengaruh Financial Distress terhadap Manajemen Laba dengan Good Corporate Governance Sebagai Variabel Moderasi. Jurnal Ilmiah Mahasiswa Akuntansi, 10(1), 31–40. https://doi.org/10.33508/jima. v10i1.3453
Torchia, M., Calabrò, A., & Huse, M. (2011). Women Directors on Corporate Boards: From Tokenism to Critical Mass. Journal of Business Ethics, 102(2), 299–317. https://doi.org/10.1007/S10551-011-0815-Z
Xiong, J. (2016). Chairman Characteristics and Earnings Management: Evidence from Chinese Listed Firms. Open Journal of Accounting, 05(04), 82–94. https://doi.org/10.4236/ojacct.2016.54008
Yuliani, R., & Rahmatiasari, A. (2021). Pengaruh corporate governance terhadap financial distress dengan kinerja keuangan sebagai variabel moderating (perusahaan manufaktur di BEI). Reviu Akuntansi Dan Bisnis Indonesia, 5(1), 38–54. https://doi.org/10.18196/rabin.v5i1.11333
DOI: http://dx.doi.org/10.30813/jab.v17i2.4983
Refbacks
- There are currently no refbacks.
Jurnal Akuntansi Bisnis by The author of this article is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Based on a work at https://journal.ubm.ac.id/index.php/akuntansi-bisnis.
Permissions beyond the scope of this license may be available at https://journal.ubm.ac.id/index.php/akuntansi-bisnis.