Next Article in Journal
An Econometric Analysis of ETF and ETF Futures in Financial and Energy Markets Using Generated Regressors
Previous Article in Journal
Goodness-of-Fit versus Significance: A CAPM Selection with Dynamic Betas Applied to the Brazilian Stock Market
Article Menu

Export Article

Open AccessArticle
Int. J. Financial Stud. 2017, 5(4), 34; https://doi.org/10.3390/ijfs5040034

Role of Social Relations of Outside Directors with CEO in Earnings Management

1
School of Accounting, Zhongnan University of Economics and Law, Wuhan 430073, China
2
School of Finance, Zhongnan University of Economics and Law, Wuhan 430073, China
*
Author to whom correspondence should be addressed.
Academic Editor: Nicholas Apergis
Received: 10 April 2017 / Revised: 17 November 2017 / Accepted: 8 December 2017 / Published: 16 December 2017
Full-Text   |   PDF [253 KB, uploaded 16 December 2017]

Abstract

The purpose of this study is to examine the impact of social relations among the board members on earnings management in Pakistani listed companies. Specifically, we have analyzed the social networks between CEO and outside board members. The modified Jones model has been used in this study to measure earnings management and we have captured social relations through SOCIAL (Social networking index). Our results suggest that firms with more connected boards show a positive relationship between board independence and earnings management. Further, we have shown that firms with CEO duality exhibit a higher association between social connections of the board and earnings management than firms with non-duality. Social relations among the board members undermine monitoring ability of outside directors and the impact becomes more severe in the presence of CEO duality. View Full-Text
Keywords: social relations; earnings management; CEO duality; outside directors social relations; earnings management; CEO duality; outside directors
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Shaique, M.; Guo, F.; Shaikh, R.; Khan, S.; Usman, M. Role of Social Relations of Outside Directors with CEO in Earnings Management. Int. J. Financial Stud. 2017, 5, 34.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Int. J. Financial Stud. EISSN 2227-7072 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top