Consideration of Corporate Governance Principles in Borsa Istanbul Corresponding to Earnings Management Applications

Abstract

This study tries to shed light to explain why Borsa Istanbul is exposed and motives behind earnings manipulation. Moreover, this paper highlights earnings management concept by reveling its motives, objectives, sanctions of Capital Market Board of Turkey and its implications. The outcomes of the study disclose that weak governance structures related to ownership structure of companies, weak internal control systems together with benefits of managers and pressure on management motivates earnings management manipulation. Furthermore, it provides an insight to low education level, small individual investor participants, and lack of intermediary and supportive firms as main reasons behind the manipulations in Borsa Istanbul.

Keywords: Earnings management, manipulation, Borsa Istanbul (BIST)