The relationship between corporate governance and earnings management in banks listed on Tehran Stock Exchange

Abstract

This study, in order to provide evidence about the effectiveness of corporate governance tools (content management stock ownership, institutional ownership and the percentage of non-duty members of the Board of Directors) on earnings management in banks was listed on Tehran Stock Exchange during 2009-2013.The sample consisted of 10 banks (all banks listed) were selected as sample data obtained through library research and application of new outcomes were collected.

In this study, three variables of management stock ownership, institutional ownership and the percentage of non-duty members of the Board of Directors as independent variables used tools of corporate governance. Also, to measure earnings management the modified Jones model and to test hypotheses of multivariate regression was used and significance was determined using t and F statistics. Finally, it was determined that between three characteristics of corporate governance (institutional ownership percentage of share ownership required for managers and other members of the board) and there was no profit management.

Keywords: Earnings management, institutional ownership percentage of share ownership management, the percentage of non-duty members of the Board of Directors