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Earnings Management, Corporate Social Responsibility and Governance Structure: Further evidence from Egypt

Abdelfattah, Tarek; Elfeky, Mostafa

Authors

Mostafa Elfeky



Abstract

This study investigates the relationship between earnings management and corporate social responsibility disclosure (CSRD). In addition, it investigates whether the joint effect of corporate governance and CSRD impacts earnings management practices in an emerging capital market, Egypt. Using a sample of non-financial firms listed in the Egyptian stock exchange for the period 2012–2017, we find evidence of the opportunistic hypothesis of corporate social responsibility. Firms use corporate social responsibility reporting to mask earnings management. Our findings show a significant role of board independence in constraining earnings management. Moreover, board independence moderates the positive relationship between CSRD and earnings management. However, other governance factors do not alleviate earnings management. Furthermore, we find that institutional ownership is positively related to discretionary accruals supporting the notion of the passive role of institutional investors in developing countries.

Citation

Abdelfattah, T., & Elfeky, M. (2021). Earnings Management, Corporate Social Responsibility and Governance Structure: Further evidence from Egypt. International Journal of Accounting, Auditing and Performance Evaluation, 17(1-2), 173-201. https://doi.org/10.1504/IJAAPE.2021.117576

Journal Article Type Article
Acceptance Date Apr 13, 2020
Online Publication Date Sep 7, 2021
Publication Date 2021
Deposit Date Nov 14, 2022
Publicly Available Date Mar 29, 2024
Journal International Journal of Accounting, Auditing and Performance Evaluation
Print ISSN 1740-8008
Electronic ISSN 1740-8016
Peer Reviewed Peer Reviewed
Volume 17
Issue 1-2
Pages 173-201
DOI https://doi.org/10.1504/IJAAPE.2021.117576
Public URL https://nottingham-repository.worktribe.com/output/13740972
Publisher URL https://www.inderscienceonline.com/doi/abs/10.1504/IJAAPE.2021.117576