Do UK Real Estate SMEs' Board Characteristics Affect Accrual-Based and Real Activities-Based Earnings Management?

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CHAO, RUIXI (2020) Do UK Real Estate SMEs' Board Characteristics Affect Accrual-Based and Real Activities-Based Earnings Management? [Dissertation (University of Nottingham only)]

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Abstract

This study surveyed the connection between board characteristics and accrual-based earnings management (AEM) and real activities-based earnings management (RAEM) in UK real estate small and medium-sized enterprises (SMEs). From 2016 to 2018, a total of 144 annual observations of real estate SMEs from the UK FTSE 350 were sampled. The capture of AEM uses the traditional Jones model (1991), and three separate components of RAEM proposed by Roychowdhury (2006) and Kim and Park's (2014) comprehensive RAEM indicator were applied to determine the level of earnings management (i.e., the dependent variable). The independent variables are these SMEs' board characteristics: board size, board non-executive directors (NEDs), board meetings, board gender diversity and CEO duality. Then, performing Stata software to obtain descriptive statistics, Pearson correlation and regression analysis on the collected data, which constructs a linear regression model of board characteristics and earnings management.

The final results of the study demonstrated that board characteristics of British real estate SMEs could restrain the opportunistic AEM and RAEM to a certain extent. Specifically, board size impacted positively on both AEM and RAEM; the proportion of NEDs and gender diversity of the board negatively affected these two types of earnings management. However, the frequency of board meetings only has a negative correlation with RAEM; there is no significant connection between CEO duality and earnings management.

Item Type: Dissertation (University of Nottingham only)
Depositing User: CHAO, RUIXI
Date Deposited: 21 Dec 2022 14:56
Last Modified: 21 Dec 2022 14:56
URI: https://eprints.nottingham.ac.uk/id/eprint/62045

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