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Non-executive female directors and earnings management using classification shifting

Zalata, Alaa Mansour; Abdelfattah, Tarek

Non-executive female directors and earnings management using classification shifting Thumbnail


Alaa Mansour Zalata


Prior business studies have focused on the role of non-executive female directors in constraining accruals-based earnings management with relatively less attention paid to other less risky earnings management methods. In contrast to these studies, we investigate whether non-executive female directors go beyond the neoclassical measurement and recognition-based accounting issues and pay more attention to the classification of core expenses within the income statement. We find evidence supporting the ongoing debate that classification shifting is less likely to attract the attention of either external or internal monitors. We did not find evidence that non-executive female directors are more likely to challenge managers’ opportunistic classificatory practices; rather, the results reveal a significant positive relationship between non-executive female directors and classification shifting. Finally, our finding remains robust after controlling for potential endogeneity problems and tokenism.

Journal Article Type Article
Acceptance Date Apr 25, 2021
Online Publication Date May 31, 2021
Publication Date Sep 1, 2021
Deposit Date Nov 14, 2022
Publicly Available Date Jun 1, 2024
Journal Journal of Business Research
Print ISSN 0148-2963
Peer Reviewed Peer Reviewed
Volume 134
Pages 301-315
Keywords Female directors; Gender diversity; Earnings management; Classification shifting 2
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