Abstract:
Effective corporate governance to oversee the financial reporting process is
fundamental to preserve investors’ confidence in the capital markets. Many
international firms endured corporate failure as a result of ineffective and
inefficient corporate governance and accounting malpractices. In Sri Lanka
several large firms collapsed due to the poor corporate governance practices.
This study aims to examine the influence of board structure on the degree of
earnings management in selected listed companies in Sri Lanka. The multiple
regression model was used to analyze the impact of the board structure on
earnings management for a sample of 28 listed companies in Sri Lanka for the
period of 2012 to 2019 and data have been collected for a period of 08
financial years from secondary sources of financial statements of listed
Companies in Colombo Stock Exchange. This study found a positive influence of
CEO duality on earnings management. The insights may also provide investors,
economic analysts and regulators with early caution indicators of potential
problems in a corporation regarding corporate governance failures and aid
stakeholders in assessing the effectiveness and efficiency of the board
structure and earnings management methods. The finding of this study will
help in monitoring and controlling fraudulent earnings management practices
existing in listed companies in Sri Lanka. This study is the initial research about
the presence of earnings management practices of listed companies in Sri
Lanka
