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- Title
The Impact of the Corporate Governance Code on Earnings Management - Evidence from Chinese Listed Companies.
- Authors
Chen, Jean J.; Zhang, Haitao
- Abstract
This study investigates the impact of the 2002 Chinese Code of Corporate Governance for Listed Companies on earnings manipulations. We find that, in general, the 2002 CODE had a positive effect on curbing earnings management through the introduction of independent non-executive directors to the board of directors and the audit committee, and accounting/financial experts to the audit committee. Although such an impact was minimal when the firms were state-controlled, it became significant once they were privately controlled. Overall, we find regulatory reform on corporate governance plays an important role in deterring the use of earnings management.
- Subjects
CHINA; EARNINGS management; CORPORATE governance; AUDIT committees; REGULATORY reform; FINANCIAL statements
- Publication
European Financial Management, 2014, Vol 20, Issue 3, p596
- ISSN
1354-7798
- Publication type
Article
- DOI
10.1111/j.1468-036X.2012.00648.x