A Study on the Characteristics of Boards of Directors and Manipulation

• Main Authors: Lin Yu-Ya, 林育雅
• Other Authors: Ko Chen-En
• Format: Others
• Language: zh-TW
• Published: 1994
• Online Access: http://ndltd.ncl.edu.tw/handle/89047912887194405279

碩士 === 國立臺灣大學 === 會計學研究所 === 82 === In theory, corporate boards of directors provide a primary mechanism for solving agency problems. In practice, many boards of directors are controlled by family members or powerful managers.In the absence of independence, the effectiveness of boards is criticized. The purpose of this study is to examine the relationship between earnings manipulation and the charateristics of boards. In this study, the charateristics of a board under investigation consist of five items: (1) independent board leadership ---- whether or not the chairman (or his close relative) serves as president (2) inside directors (3) family related directors (4) institutional directors (5) the family structure of a board. Discretionary accrual and nonoperating items in income statements are used as proxies of earnings manipulation. Wilcoxon two sample test, analysis of variance and multiple regression test are performed to test the hypothesis developed by this study and to derive the conclusion. The findings of this study are as follows. The independence of board leadership affects earnings manipulation significantly. The percentage of inside directors in a board is negatively related to the earnings manipulation.Both family- related and institutional directors affect earnings manipulation but the direction of their relationship depends on the situation faced by individual firm. The relationship of family structure and earnings manipulation is unclear.