The effect of board attributes and ownership structure on real earnings management in Vietnamese businesses

Abstract

The primary of this study is to extend previous research by examining how board attributes and ownership structure affect the real activities manipulation which calculated by model from Roychowdhury (2006) and Gunny (2010). The panel data regression model is used for a sample of 512 non-financial listed Vietnam companies for the years 2012 to 2018. The main result shows that real activities manipulation is negatively or positively associated with various factors. The larger board size is more effective in earnings management.
Contradictory, the CEO duality is found to have a positive relationship suggesting that combining the role of the CEO and that of the chairman of the board helps increase earnings management. In general, foreign ownership, institutional ownership, and state ownership all play a role in limiting real activities manipulation by overproducing. However, it also shows the positive between foreign ownership and sale manipulation and reduction of discretionary expenditures.