THE EFFECT OF CORPORATE GOVERNANCE, CONCENTRATED OWNERSHIP, AND EARNINGS MANAGEMENT: EVIDENCE FROM EMERGING COUNTRY

Abstract

The purpose of the study was to ascertain how corporate governance (CG) elements affected earnings management (EM). Additionally, the study looks into how concentrated ownership may moderate the previously observed link. This study used a sample of 40 Iraqi private banks from 2018 to 2023 to fulfill its aims. STATA was employed to examine the data and ascertain the outcomes of the hypotheses. The findings indicated that EM, as determined by discretionary accruals, was negatively correlated with board independence, board size, and board overlap. Additionally, it found that board overlap, financial knowledge, and independence had a detrimental impact on EM., as assessed by REDCA. It was also found that concentrated ownership interacts with the association between CG and EM. This study enables Iraqi regulators and policymakers to enhance earnings quality because it gives them a clear understanding of the CG elements that affect EM. This is particularly important because CG is a relatively new issue in Iraq and requires more attention.

Keywords: Corporate governance, Earnings management, Concentrated ownership, Iraqi banks.