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Board independence, audit quality and earnings management: evidence from Egypt

Khalil, Mohamed; Ozkan, Aydin


Aydin Ozkan


Using a unique dataset for Egyptian firms, we investigate the relationship between board independence, audit quality and earnings management. We test whether firm-level corporate governance provisions matter in an emerging market setting characterised by weak legal enforcement and inadequate external discipline by the market for corporate control. Our results cast doubt on the notion that a higher ratio of non-executive members is associated with lower earnings management. We find that the effect of board independence on earnings management practices is contingent on the levels of ownership held by executive directors and large shareholders, as well as the composition of audit committee. In addition, the results are consistent with the view that high-quality auditors are effective in reducing earnings management. JEL Classification: M41, M48


Khalil, M., & Ozkan, A. (2016). Board independence, audit quality and earnings management: evidence from Egypt. Journal of emerging market finance, 15(1), 84-118.

Acceptance Date Sep 17, 2015
Online Publication Date Feb 7, 2016
Publication Date 2016-04
Deposit Date Oct 26, 2015
Publicly Available Date Nov 23, 2017
Journal Journal of emerging market finance
Print ISSN 0972-6527
Electronic ISSN 0973-0710
Publisher SAGE Publications
Peer Reviewed Peer Reviewed
Volume 15
Issue 1
Pages 84-118
Keywords Earnings managment; Board independence; Audit quality; Corporate governance
Public URL
Publisher URL
Additional Information Author's accepted manuscript of article published in: Journal of emerging market finance, 2016, v.15, issue 1.


Khalil& Ozkan Journal of Emerging Markets Finance.pdf (568 Kb)

Copyright Statement
©2015 University of Hull

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