CORPORATE GOVERNANCE MECHANISM AND EARNINGS MANAGEMENT

Abstract

This study will support the claim that corporate governance (CG) mechanisms are able to overcome earnings management (EM) activities. The ownership structure will be tested from the perspective of family firm and non-family firm. Managers manage their earnings for various reason that would involves either for their incentives such as bonus and salary. While for the company purposes the earnings management may affected or vise-versa from the debt to equity or leverage. The purpose of the study is to examine the relationship between corporate governance and earnings management in Malaysia. In addition to examining the relationship, this study will also investigate the impact of ownership structure toward earnings management. The data for the study will obtained from secondary data (annual report and data stream).

Keywords: Earnings management, ownership structure, corporate governance, executive remuneration and leverage.