Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 196

Full Length Research Paper

Board-diversity, audit committee characteristics and earnings management: Family versus non-family controlled firms

Uddin Mohammad Helal
  • Uddin Mohammad Helal
  • 1School of Economics and Management, Southwest Jiao tong University, Chengdu, Sichuan, China. 2Department of Business Administration, Faculty of Business studies, International Islamic University, Chittagong, Bangladesh.
  • Google Scholar

  •  Received: 10 March 2022
  •  Published: 29 April 2022


This study examines the impact of board diversity, audit committee attributes, and the interaction of family ownership on earnings manipulation. The study employs the Caylor and Roy Chowdhury models to quantify accrual and real earnings management, respectively, in a developing country setting. Data was collected from non-financial organization operating in Bangladesh during the period from 2011 to 2019. Furthermore, depending on 10% or more ownership, a chosen sample was split into family and non-family managed enterprises. The findings of the research suggest that board size and audit committee meetings can reduce accrual earnings management, but the independent director in the boardroom increase real-earnings management. Moreover, the corporate governance index (CGI) decreases accrual earnings management. Interestingly, board diversity and audit committee characteristics effectively curb earnings management in family companies more than in non-family enterprises. Family ownership strengthens the impact of board diversity and audit committee characteristics on earnings management. Finally, the findings of the study are resilient when considered for endogeneity and other diagnostic checks. The study's findings also add to the corporate governance literature by revealing the impact of board diversity and audit committee characteristics on earnings management in a developing country setting. The application of the Caylor model to measure accrual earnings management and a comparative analysis of family and non-family enterprises in this regard are limited and the first study in the context of Bangladesh.


Key words: Board and audit committee characteristics, earnings management, non-financial organization, family and non-family firms, Bangladesh stock exchanges.