Accounting Earnings And Corporate Governance

Examining the Association between Corporate Governance and Quality of Accounting Earnings

Table of Contents

CHAPTER NO 1: INTRODUCTION3

Statement of the Problem3

Research Question3

Journal Selection3

CHAPTER NO 2: LITERATURE REVIEW5

Ambit of Corporate Governance6

CHAPTER NO 3: RESEARCH DESIGN AND METHODOLOGY10

Data Sources and Research Limitations10

Sample selection10

Data Type10

Variables11

Reliability11

Validity12

CHAPTER NO 4: RESULTS13

CHAPTER NO 5: CONCLUSION14

CHAPTER NO 1: INTRODUCTION

Statement of the Problem

The study is related to the corporate governance and the accounting earnings. For an organization, it is important and essential that the company should effectively manage that corporate governance with in the organization so that the objectives of the company can be achieved. In relation to this, the quality of accounting earnings is an important and crucial concept which may get affected due to the practices of the corporate governance. In addition to this, for the quality of accounting earnings, it is important that the organization should work on the factors that affect the accounting earnings; moreover, the corporate governance is possibly associated with the quality of accounting earnings. In addition, it is also significant and imperative that to from corner to corner the comparison of industry in relation to the performance of the organizations and the accounting earnings is controlled by the factors that are included in the corporate governance.

Research Question

Does corporate governance affect accounting earnings?

Journal Selection

Journal 1

Earnings management to exceed thresholds by Degeorge, Patel and Zeckhauser.

Journal 2

Earnings Management and Corporate Ownership Structure : An Examination of Extraordinary Item Reporting by Dempsey, Hunt and Schroeder.

Journal 3

The Structure of Corporate Ownership: Causes and Consequences by Demsetz and Lehn.

Journal 4

Does corporate governance really matter? by Larcker.

CHAPTER NO 2: LITERATURE REVIEW

Empirical accounting research has been steadily increasing the availability of databases with detailed capital market and financial statement. This trend follows the U.S. accounting research that has already begun in the late 1960s to conduct systematic analysis of various accounting information. It is documented that many statistical analysis methods and association and event studies, the actual characteristics and developments of profits, equity values ??and other elements of accounting. Confirmed the results obtained are usually intuitive hypotheses or by the formation of fictitious portfolio, which can be achieved because of "anomalies" ex-post excess profits (abnormal earnings) would have. As a consequence of this approach in accounting research are empirical research findings in the U.S. now also of particular importance for the development of new accounting standards by the Financial Accounting Standards Board (FASB) and the Security and Exchange Commission (SEC) (Demsetz, 1985, 77-1155).

In this context to quality of accounting earnings and corporate governance, particular mention is the empirical investigation of the so-called earnings quality. One reason for this focus of research is probably in the practical use and thus the practical relevance of outcome variables such as sales, net income, EBIT (earnings before interest and taxes) or EBITDA (earnings before interest, taxes, depreciation and amortization). Thus, these earnings figures used, among other things, the financial statements of various methods for business valuation (for example, the multiplier method) or serve the preparers as a starting point for ...