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Analysis of Earnings Management as a Mediator in Corporate Governance and Firm Performance |
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PP: 151-164 |
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doi:10.18576/jsap/140202
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Author(s) |
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Ayman S. M. Harb,
Omar F. Shaqqour,
Thaer F. A.Qushtom,
Osama M. K. Ballout,
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Abstract |
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| In this research, we discussed the financial sectors, industrial, and service sectors in Jordan from 2013 to 2021 to determine how earnings management affects the influence of corporate governance mechanisms on firm performance. Research analysis integrated corporate governance mechanisms linked to board structure, ownership structure, and the audit committee. According to the Modified Jones Model, the degree of discretionary accruals was employed as a proxy for earnings management. To determine the mediating role of earnings management, we used the framework developed by Preacher and Hayes. The study found that an independent audit committee was negatively correlated with firm performance. Return on Assets, Return on Equity, and Tobins Q were all found to be negatively correlated with board independence. There is a statistically significant positive association between business performance and the remaining constructions (board size, CEO duality, audit committee size, audit committee ownership, and ownership structure). In addition, there was a strong link between earnings management and corporate governance mechanisms.
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