Do Founding CEOs and Board Meetings Influence Earnings Management? The Moderating Role of Family Ownership

Abstract

The study examines the impact of founding CEOs, board meetings, and family ownership on earnings management through three discretionary accrual models. We employ a quantitative approach to investigate the moderating effect of family ownership structure on the nexus between corporate governance and earnings management. Using 150 non-financial firms from 2016–2021, we find that founding CEOs and family-owned Organizations are becoming less engaged with earnings management than other firms. In contrast to previous studies, we find that a higher number of board meetings creates higher discretionary accruals in Pakistan. The study has various implications for investors, academic researchers, policymakers, and regulators in Pakistan. Our findings may help improve the corporate governance system and reduce agency problems, which most firms face in their organizations. Investors also benefit from this study when making investment decisions. Some limitations face this study. Firstly, the data of the study only consists of Pakistan stock exchange-listed companies, which may not be able to give complete information related to other European and Asian countries.