內(nèi)部治理結(jié)構(gòu)與盈余管理外文文獻(xiàn)及翻譯

1、lntu-acc附錄a內(nèi)部治理結(jié)構(gòu)與盈余管理瑞安戴維森，珍妮古德溫-斯圖爾特，帕梅拉肯特 1 前言最近在澳大利亞及海外的操縱會計行為的案件表明公司治理機(jī)制的重要性，強(qiáng)有力的公司治理涉及到與公司績效水平監(jiān)測的一個適當(dāng)?shù)钠胶?cadbury,1997)。在本論文中，我們以澳大利亞的公司治理為例探索治理機(jī)制與盈余之間的關(guān)系，因此，我們的重點是治理的監(jiān)督作用。我們研究的是獨立的董事局（shleiferandvishny，1997），獨立委員會主席，一個有效的審計委員會（menonandwilliams，1994年），內(nèi)部審計（clikeman，2003年）和外部審計師的選擇使用（貝克爾埃塔爾，1998

2、；弗朗西斯埃塔爾，1999）對盈余管理產(chǎn)生的影響。在此之前的研究已經(jīng)調(diào)查了治理機(jī)制可以減少欺詐性財務(wù)報告的產(chǎn)生（比斯利，1996; dechowetal，1996年）。這些研究認(rèn)為有效的治理機(jī)制和真實的財務(wù)報告與違反一般公認(rèn)會計原則（gaap）呈負(fù)相關(guān)關(guān)系。不過，相對較新的研究領(lǐng)域是公司治理與盈余管理。peasnell等（2000）研究表明盈余管理與董事會的獨立性是負(fù)相關(guān)的，而另一些研究發(fā)現(xiàn)審計委員會與盈余管理之間存在顯著的關(guān)系（chtourouetal.2001; xieetal，2001）。澳大利亞公司內(nèi)部治理結(jié)構(gòu)和盈利管理實踐檢驗是具有前提條件的，而peasnell使用的數(shù)據(jù)主要是研究美

3、國的。因此，的內(nèi)部審計委員會。此外，企業(yè)監(jiān)管者青睞以原則為基礎(chǔ)的治理方法，而不是一個以規(guī)則為基礎(chǔ)的方法（澳大利亞，2003年）。雖然在英國存在著類似的做法，peasnelletal（2000）只研究盈余管理與外部董事在董事會的比例，以及審計委員會的存在關(guān)系。我們通過額外研究檢驗審計委員會規(guī)模、開會頻率及獨立審計人員人數(shù)對盈余管理的影響。我們也研究董事會的獨立性，研究首席執(zhí)行官和董事會主席的角色分離對盈余管理產(chǎn)生的影響、研究董事長與總經(jīng)理職務(wù)的分離與盈余管理相關(guān)。我們的實證研究使用可控性應(yīng)計項目來衡量盈余管理，證明盈余管理水平較低是與非執(zhí)行董事在董事會的比例有關(guān)。我們還發(fā)現(xiàn)當(dāng)審計委員會中大部分成

4、員為非高管時盈余管理程度較低，當(dāng)審計委員會中只有少數(shù)為非高管時其與盈余管理不相關(guān)。我們的研究結(jié)果不支持盈余管理與內(nèi)部審計相關(guān)，也不支持是否使用五大會計師事務(wù)所的人員進(jìn)行審計與是否存在盈余管理兩者存在相關(guān)性。進(jìn)一步測試，使用收入的變化代表盈余管理的變化，表明審計委員會與收益管理措施相關(guān)。這些結(jié)果具有重要的現(xiàn)實意義，因為各國政府、監(jiān)管機(jī)構(gòu)和標(biāo)注制定者更加關(guān)心企業(yè)管制事宜。2理論背景和假設(shè)2.1盈余管理披露真實的會計信息是公司治理的核心，因為它能確保利益相關(guān)者行使其權(quán)利，同時保護(hù)他們的利益（經(jīng)合組織，1999）。不過，盈余管理，被定義為扭曲一個公司真正的財務(wù)執(zhí)行情況，它可能掩蓋地下交易削弱公司檢測機(jī)

5、制（場埃塔爾，2001）出版的研究和實證測試了各種盈余管理發(fā)生的動機(jī)，大致包括代理成本、信息不對稱和外部因素影響非締約方。然而，我們主要關(guān)心的是某些公司治理結(jié)構(gòu)限制盈余管理，而不是具體的鼓勵盈余管理出現(xiàn)的措施。雖然我們試圖控制兩個普遍應(yīng)用盈余管理的動機(jī)：即，避免違反債務(wù)契約（defondandjiambalvo，1991,1994）和避免政治成本，（wattsandzimmerman，1978；瓊斯，1991年; jiambalvo，1996年）。我們的方法是以董事會作為企業(yè)的代表性部分而不是確定一個強(qiáng)烈的帶有盈余管理動機(jī)的子集。這樣的公司往往是針對具體情況的子集（例如最近的經(jīng)營模式的轉(zhuǎn)變，敵

6、意收購或新的資金籌集），而這些情況有可能是我們研究的內(nèi)部治理機(jī)制的內(nèi)生變量。2.2內(nèi)部治理結(jié)構(gòu)一個企業(yè)的內(nèi)部治理結(jié)構(gòu)包括建立監(jiān)督和影響公司管理行為的職能和程序。設(shè)立這些機(jī)制的目的在于保持財務(wù)報表的可信度和規(guī)范性（dechow等，1995）2.2.1董事會法瑪和詹森（1983年）認(rèn)為董事會是公司治理結(jié)構(gòu)中最重要的控制機(jī)制，因為它是內(nèi)部治理結(jié)構(gòu)的核心。從監(jiān)督財務(wù)的角度，一個有效的董事會應(yīng)該確保管理層作出的會計選擇及其產(chǎn)生的影響的有效性。從機(jī)構(gòu)的角度看，董事會獨立性是董事會發(fā)揮其有效的監(jiān)督機(jī)制的保證（比斯利，1996；dechow等，1996）。董事會獨立性是指董事會中與公司執(zhí)行董事沒有任何關(guān)聯(lián)的非

7、執(zhí)行董事所占的比重。獨立董事是指不參與該公司的業(yè)務(wù)活動，作為一個局外人監(jiān)督董事會董事（漢拉漢等人，2001）的假設(shè)：那些非主管上級的監(jiān)測能力可以歸結(jié)為激勵，以維持在外部勞動力市場上的聲譽(yù)。目前出版的文獻(xiàn)支持澳大利亞和國際公司治理準(zhǔn)則，這些準(zhǔn)則承認(rèn)非執(zhí)行董事的監(jiān)督作用的重要性。這些文章建議董事會的組成方面的最佳做法是，至少一個非執(zhí)行董事或獨立董事占多數(shù)。這是經(jīng)過研究的證據(jù)，如比斯利（1996年）認(rèn)為，董事會獨立董事的存在降低了財務(wù)報表舞弊的可能性，以及dechow等（1996）報告認(rèn)為，企業(yè)具有較大比例的非執(zhí)行董事不太可能違反美國公認(rèn)會計準(zhǔn)則?；谶@些發(fā)現(xiàn)，peasnell和chtourou等（

8、2000）預(yù)測，董事會的獨立性可能與盈余管理負(fù)相關(guān)。然而他們并沒有通過實證分析美國公司盈余管理與董事會獨立性之間存在關(guān)系。因此，我們提出了如下假設(shè)： h1,0：盈余管理與董事會的獨立性是負(fù)相關(guān)的另一個重要特點是董事會是否有一個主席和首席執(zhí)行長（ceo）的角色分離。然而亞瑟和泰勒（1993）指出，當(dāng)ceo也是董事會主席時，董事會的執(zhí)行能力及監(jiān)測作用會被削弱10。行政總裁被委任為主席一職可能導(dǎo)致權(quán)力的集中（比斯利，1996年）和可能的利益沖突，使公司治理結(jié)構(gòu)水平下降。因此，我們提出了如下假設(shè)：h2,0:盈余管理與行政總裁和董事會主席“兩職合一”負(fù)相關(guān)2.2.2 審計委員會為了更有效地履行其職責(zé)，董

9、事會可以委派董事會委員會的職責(zé)。就監(jiān)督管理的財政自由裁量權(quán)而言，審計委員會確保保持公司財務(wù)報表的可信性從而最大限度的保障股東權(quán)利。這是因為審核委員會為財務(wù)報告提供了專門的監(jiān)測。在澳大利亞，政府的經(jīng)濟(jì)改革計劃公司法（審計改革和公司信息披露）（澳大利亞聯(lián)邦，2004年）提出了世界500強(qiáng)上市公司強(qiáng)制配置審計委員會的法案。此外，澳大利亞證券交易所（asx）在2003年修訂的上市規(guī)則中要求任何公司包括涉及標(biāo)準(zhǔn)普爾指標(biāo)的上市公司，在其財政年度開始時具有審計委員會。然而，在2000年，沒有規(guī)定上市公司必須具有審計委員會，只規(guī)定沒有審計委員會的上市公司應(yīng)在年度報告公司治理中披露這種情況原因。之前發(fā)表的文獻(xiàn)表

10、明審計委員會的有效性取決于委員會的獨立性及會議的頻率和大小。如果審計委員會成員也是該公司高管，則審計委員會是無法有效運(yùn)行的。無論是公開發(fā)表的文獻(xiàn)還是公司治理的報告都顯示，審計委員會應(yīng)完全是由非執(zhí)行董事或獨立董事組成。這是通過研究審計委員會獨立性、活躍程度與財務(wù)報表舞弊的發(fā)生頻率得出的結(jié)論。與此相反，克萊因（2002年）的報告發(fā)現(xiàn)，審計委員會中獨立董事越多，盈余管理越差；當(dāng)審計委員會完全由獨立董事?lián)螘r，盈余管理與其沒有關(guān)系。為了有效地監(jiān)督管理財務(wù)權(quán)限，審計委員會將審閱財務(wù)報告，同時促進(jìn)董事會、內(nèi)部審計委員會與外部進(jìn)行信息的交流。然而，科恩等人發(fā)現(xiàn)內(nèi)部審計師的存在可以減少外部審計師與管理層的沖突

11、。因此，審計委員會需要被激活使其有效地履行其職責(zé)，審計委員會通過在財政年度內(nèi)舉行委員會會議，增加開會次數(shù)可以提高其執(zhí)行能力。研究發(fā)現(xiàn)，審計委員會開會頻率與盈余管理呈負(fù)相關(guān)，美國證券交易委員會將可控性應(yīng)計利潤作為衡量盈余管理的標(biāo)準(zhǔn)。一些企業(yè)管理報告建議，審計委員會應(yīng)至少包括三名成員。一個有效的審計委員會為公司提供了對盈余管理進(jìn)行約束的方法。因此，我們提出了如下假設(shè)：h2:盈余管理與有效的審計委員會負(fù)相關(guān)。2.2.3內(nèi)部審計職能除了審計委員會，企業(yè)可以自愿建立內(nèi)部審計職能，以補(bǔ)充其現(xiàn)有的內(nèi)部管治架構(gòu)。內(nèi)部審計委員會可以提高公司風(fēng)險管理，控制公司治理的進(jìn)程和有效性，為公司提供了一個保證和咨詢服務(wù)。審

12、計工作的目標(biāo)是與財務(wù)報告的審計委員會的監(jiān)督職責(zé)對齊，內(nèi)部審計將有利于審計委員會的有效運(yùn)作。內(nèi)部審計是為了改善公司內(nèi)部治理流程而產(chǎn)生的。雖然傳統(tǒng)內(nèi)部審計的重點是控制和操作風(fēng)險，但越來越多的文獻(xiàn)表明應(yīng)將重點集中于盈余管理和不恰當(dāng)?shù)呢攧?wù)報告。前安然公司副總裁認(rèn)為，內(nèi)部審計人員應(yīng)尋求警告標(biāo)志，如高級管理人員的不當(dāng)壓力，以滿足盈利目標(biāo)和補(bǔ)償安排，可能會鼓勵員工操縱盈余，以獲得經(jīng)濟(jì)獎勵。內(nèi)部審計人員不僅要積極參與檢測盈余管理，同時應(yīng)采取積極的態(tài)度參與管理董事及財務(wù)過程。他們認(rèn)為，審計委員會應(yīng)積極參與管理不當(dāng)收入的檢測，從而提供有效意見。這些參數(shù)表明，內(nèi)部審計職能的存在應(yīng)與盈余管理水平較低有關(guān)。因此，提出以

13、下假設(shè)：h3:盈余管理與內(nèi)部審計存在負(fù)相關(guān)2.2.4 外部審計一個公司的審計人員的選擇是公司內(nèi)部治理機(jī)制的一部分，可能與盈余管理相聯(lián)系。研究數(shù)據(jù)表明，大型會計師事務(wù)所被認(rèn)為比小型會計師事務(wù)所執(zhí)行高品質(zhì)稽核。然而諸如美國和澳大利亞安然公司的例子可能并非如此，大公司更注重財務(wù)報告，小公司更注重監(jiān)控過程。大型審計公司有更多的資源和知識檢測盈余管理，但是他們也有更大的動力保護(hù)自己的名聲來鞏固自己的客戶群。過去的研究表明，5大會計師事務(wù)所審計的公司盈余管理水平低于沒有聘用5大的公司。因此，我們預(yù)計選擇5大審計師的公司不太可能進(jìn)行盈余管理。因此，提出以下假設(shè)：h4：盈余管理與使用5會計師事務(wù)所審計人員負(fù)相

14、關(guān)。3 研究設(shè)計3.1樣本選取我們的初始樣本包括568個公司，其數(shù)據(jù)可以在公司網(wǎng)站或數(shù)據(jù)庫中找到。財務(wù)資料和有關(guān)的董事會及審計委員會的資料可以在年報中查詢。然而，年度報告有關(guān)內(nèi)部審計的披露使用不是強(qiáng)制，因此， （3-1）式中：ai,t-1表示公司 i 第 t-1 年末的總資產(chǎn)； drevi,t為公司 i 在第 t 年和第 t-1 年的主營業(yè)務(wù)收入的差額； 為公司 i 在第 t 年和第 t-1 年的應(yīng)收賬款凈額的差額； dreci,t ppei,t i公司第t年的固定資產(chǎn)；式中各變量除以期初總資產(chǎn)是為了消除公司規(guī)模的影響(2)非可控性應(yīng)計利潤的計算運(yùn)用得出的各參數(shù)估計值，代入下列模型計算出研究樣

15、本公司的以資產(chǎn)計量的非可控性應(yīng)計利潤。ndai,t/ai,t= a1+a2（drev-drec）/ ai,t+a3ppei,t/ ai,t （3-2）其中a1、a2、a3分別為a1、a2、a3的估計值ndai,t ：i公司第t年的非可控性應(yīng)計利潤（3）總應(yīng)計利潤tai,t= nii,tcfoi,tnii,t是公司 i 第 t 年凈利潤cfoi,t是公司 i 第 t 年經(jīng)營活動現(xiàn)金流量凈額(4)可控性應(yīng)計利潤的計算根據(jù)研究樣本公司的非可控性應(yīng)計利潤 nda和總體應(yīng)計利潤 ta，計算可控性應(yīng)計利潤 da：dat=tat-ndai,ttai,t研究樣本公司i第t年的應(yīng)計利潤總額3.2.2公司內(nèi)部治理

16、結(jié)構(gòu)變量在如果一個公司在報告期內(nèi)已經(jīng)設(shè)立審計委員會則虛擬變量取1，否則為0。如上所述，審計委員會獨立性不同，我們的模型就不同。為了測試內(nèi)部審計職能的假設(shè)，當(dāng)公司有自己的內(nèi)部審計職能時虛擬變量取1，否則取0。同樣的，當(dāng)公司使用5大會計師事務(wù)所進(jìn)行審計時虛擬變量取1，否則取0。3.2.3控制變量眾多學(xué)者的研究表明，若不控制影響盈余管理行為的其他因素，將不利于實證分析的正確性。因此，size：年初總資產(chǎn)的對數(shù)。加入此變量用于控制公司規(guī)模對盈余管理的影響。通常，大公司的管理層擁有更廣闊的空間來進(jìn)行盈余管理行為。debt：資產(chǎn)負(fù)債率。公司的債務(wù)契約限制通常會對盈余管理行為產(chǎn)生影響，當(dāng)公司面臨較高的違約風(fēng)

17、險時，容易通過盈余管理行為來避免財務(wù)危機(jī)，而資產(chǎn)負(fù)債率通常作為債務(wù)契約中重要的限制性指標(biāo)。3.3回歸模型以下模型是用來檢驗前文所提出的假設(shè)：da=+1bdind+2indchair+3ac+4acind+5acmeet+6acsize+7iaf+ig54研究結(jié)果通過多因素分析，可以得出一下結(jié)論：1.2.對于假設(shè)2，我們沒有找到可控性應(yīng)計利潤與審計委員會獨立性或?qū)徲嬑瘑T會本身之間的關(guān)系。但發(fā)現(xiàn)審計委員會中非行政人員的增多會導(dǎo)致盈余管理下降。這一結(jié)論與克萊的研究結(jié)果一致，獨立董事在審計委員會中比重增大時盈余管理會相應(yīng)減少，但一個完全獨立的審計委員會與盈余管理沒有關(guān)系。3.我們沒有找到盈余管理與內(nèi)部

18、審計之間的關(guān)系或者使用5大會計師事務(wù)所與盈余管理之間的關(guān)系。雖然兩個系數(shù)與假設(shè)一致為負(fù)但并不十分顯著，因此我們認(rèn)為假設(shè)3和假設(shè)4不成立。4.在模型的七個控制變量中，有四個與盈余管理有顯著相關(guān)關(guān)系。盈余管理與凈收入的變化、凈收入有顯著關(guān)系。同時，盈余管理與企業(yè)規(guī)模、與市場相關(guān)的股權(quán)激勵負(fù)相關(guān)。但我們沒有發(fā)現(xiàn)大股東持股比例與盈余管理存在關(guān)系。5.總結(jié) 通過本研究結(jié)果對那些盡量減少盈余管理方法及提高財務(wù)質(zhì)量的人們來說具有重要作用。同時也暗示出應(yīng)基于會計信息披露質(zhì)量來優(yōu)化公司內(nèi)部治理結(jié)構(gòu)的重要性。今后應(yīng)加強(qiáng)對審計委員會的監(jiān)督，強(qiáng)化公司內(nèi)部審計職能，使其發(fā)揮更大的成效以減少盈余管理。當(dāng)然 附錄binte

19、rnal governance structures and earningsmanagementryandavidson ,jennygoodwin-stewart ,pamelakentabstractthis paper investigates the role of a firms internal governance structures constraint in earnings management. it is hypothesized that the practice of earnings management is systematically related t

20、o the strength of internal corporate governance mechanisms,including the board of directors ,the audit committee,the internal audit function andthe choice of external auditor. based on a broad cross-sectional sample of 434 listed australian firms,for the financial year ending in 200,a majority of no

21、n-executive directors on the board and on the audit committee are found to be significantly associated with a lower likelihood of earnings management,as measured by the absolute level of discretionary accruals. the voluntary establishment of an internal audit function and the choice of audit are not

22、 significantly related to a reduction in the level of discretionary accruals. our additional analysis,using small increases in earnings as a measure of earnings management,also found a negative association between this measure and the existence of an audit committee.key words:audit committee;corpora

23、te governance;earnings management;internal audit function1 introductionrecent cases of inappropriate accounting practices,both in australia and overseas,have focused attention on the need for strong corporate governance mechanisms. strong governance involves balancing corporate performance with an a

24、ppropriate level monitoring(cadbury,1997). in the present paper,we explore the relationship between governance mechanisms and earnings management by firms in australia and,hence,our focus is on the monitoring role of governance. the mechanisms we examine are an independent board of directors(shleife

25、randvishny,1997),an independent board chair person,an effective audit committee(menonandwilliams,1994),the use of internal audit(clikeman,2003)and the choice of external auditor(becker etal.,1998;francis etal.,1999).prior research has investigated the role of governance mechanisms reducing fraudulen

26、t financial reporting(beasley,1996;dechowetal.,1996;jiambalvo,1996).these studies have established a negative relationship between effective governance mechanisms and financial reporting decisions that are in breach of generally accepted accounting principles(gaap). however,a relatively new area of

27、research is the association between corporate governance and earnings management. peasnell et al(2000) document that earnings management is negatively associated with the independence of the board of directors,while other studies find significant relationships between audit committee characteristics

28、 and earningsmanagement(chtourouetal.,2001;xieetal.,2001;klein,2002a). the examination of the association between internal governance structures and the practice of earnings management in australian firms is motivated by several factors. with the exception of peasnell et al.(2000),which uses data,ex

29、isting research is predominantly us based. therefore,we explore whether the internal governance-earnings management relationship holds in an institutional environmen where corporate governance is less regulated and choice of governance mechanisms is voluntary(vonnessen,2003). in australia,at the tim

30、e of the present study(2000),listed companies were not required to have an audit committee or an internal audit function. furthermore,corporate regulators favour principles-based approach to governance rather than a rules-based approach(asx,2003). although a similar approach exists in the uk,peasnel

31、letal.(2000)examine only the relationships between earnings management and the proportion of outside directors on the board and the existence of an audit committee. we extend this research by exploring the effect of additional audit committee variables such as size and frequency of meetings as well

32、as the independence of members. we also extend board independence to examine whether the separation of the chief executive and board chair roles is associated with earnings management. a further contribution is the inclusion of internal audit as a governance mechanism that is likely to be associated

33、 with a reduction in the level of earnings management. while there has been increasing emphasis on the role played in governance by internal audit,no prior earnings management studies have included this variable. australia is an ideal setting to examine this issue as evidence suggests that many list

34、ed companies in australia do not have an internal audit function. goodwin and kent(2003)report that the use of internal audit is associated with the size of the company and its commitment to strong corporate governance and risk management.our principal tests,using absolute discretionary accruals to

35、measure earnings management,suggest that a lower level of earnings management is associated with the presence of non-executive directors on the board. we also find a negative association between earnings management and audit committees comprising a majority of non executives,but no relationship betw

36、een earnings management and committees comprised solely of non-executives. our results do not support a relationship between earnings management and the use of internal auditor the choice of a big 5 auditor. additional testing,using small positive changes in earnings as an indication of earnings man

37、agement,suggests that audit committees are associated with this measure of earnings management.these results have important practical implications because of the heightened interest in corporate governance matters from governments,regulators and standard setters.the remainder of the paper is divided

38、 into four sections. section 2 provides the theoretical background for the study and develops the hypotheses.section 3 outlines the research method used to test the hypotheses. it also discusses the measurement of earnings management through the estimation of discretionary accruals.section 4 reports

39、 the present studys results. section 5 concludes by discussing the implications of the research findings,highlighting potential limitations and considering future areas for research.2 theoretical background and hypotheses2.1earnings management the preparation and disclosure of true and fair financia

40、l information is central to corporate governance,as it provides stakeholders with a foundation to exercise their rights,in order to protect their interests(oecd,1999). however,earnings management,defined as the practice of distorting the true financial performance of (a) company (sec,1999,p.3),effec

41、tively weakens this monitoring mechanism as it might conceal poor underlying performance. the published literature has developed and empirically tested a variety of motivations for earnings management to occur(fields etal.,2001). these fall broadly within the categories of agency costs,information a

42、symmetries and externalities affecting non-contracting parties. however,we are primarily concerned with the extent to which certain corporate governance attributes limit the opportunity to manage earnings,rather than specific incentives for earnings management to occur. although we attempt to contro

43、l for two widely documented motives for earnings management;namely,avoiding breaching debt covenants(defondandjiambalvo,1991,1994) and avoiding political costs(wattsandzimmerman,1978;jones,1991;jiambalvo,1996), our approach is to examine a board cross-section of firms rather than identifying a speci

44、fic subset with strong incentives to engage in earnings management. such subsets of firms are often context specific(e.g. recent managerial change,hostile takeover or new capital raising)and these contexts are likely to be endogenous to the internal governance mechanisms we examine.2.2 internal gove

45、rnance structurethe internal governance structure of a firm consists of the functions and processes established to oversee and influence the actions of the firms management. the role of these mechanisms in relation to financial reporting is to ensure compliance with mandated reporting requirements a

46、nd to maintain the credibility of a firms financial statements(dechow et al.,1995).the mechanisms that we examine in the present study are the board of directors,the audit committee,the internal audit function and the choice of external auditor.2.2.1 board of directorsfama and jensen(1983a,b)recogni

47、ze the board as the most important control mechanism available because it forms the apex of a firms internal governance structure.in terms of monitoring financial discretion,an effective board of directors should ascertain the validity of the accounting choices made by management and the financial i

48、mplications of such decisions(nyse,2002).from an agency perspective,the ability of the board to act as an effective monitoring mechanism is dependent upon its independence from management(beasley,1996;dechow et al.,1996).board independence refers to the extent to which a board is comprised of non-ex

49、ecutive directors who have no relationship with the firm beyond the role of director. a non-executive director is defined as a director who is not employed in the companys business activities and whose role is to provide an outsiders contribution and oversight to the board of directors(hanrahan et a

50、l.,2001).a non-executive director who is entirely independent from management is expected to offer shareholders the greatest protection in monitoring management (baysinger and butler,1985).fama and jensen(1983a,b)posit that the superior monitoring ability of non-executives can be attributed to the i

51、ncentive to maintain their reputations in the external labour market.the published literature is supported by australian and international corporate governance guidelines,which recognize the importance of the monitoring role of non-executive directors(aima,1997,1995;oecd,1999;nyse,2002;asx,2003;stan

52、dardsaustraliainternational,2003;bosch committee,1995;cadbury committee,1992).these guides suggest that best practice with respect to board composition is,at least,a majority of non-executive or independent directors.this is supported by research evidence such as beasley(1996),who finds that the pre

53、sence of independent directors on the board reduces the likelihood of financialstatement fraud,and dechow et al.(1996),who report that firms with a greater proportion of non-executive directors are less likely to be subject to securities and exchange commission(sec)enforcement actions for violating

54、us gaap.based on these findings,both peasnell et al.(2000)and chtourou et al.(2001)predict that board independence is also likely to be associated with a reduction in earnings management.while peasnell et al.(2000)find empirical support for their prediction with respect to uk firms,chtourou et al.(2

55、001)fail to find an association between earnings management and board independence for a sample of us firms.despite these conflicting results,we hypothesize a negative association between board independence and earnings management.therefore,we test the following hypothesis:h1(a):earnings management

56、is negatively associated with the independence of the board of directors.another important characteristic of boards is whether there is a separation of the roles of the chairperson and the chief executive officer(ceo).while arthur and taylor(1993)point out that the underlying economic determinants o

57、f separating these roles are not well understood,corporate governance guidelines assume that a boards ability to perform a monitoring role is weakened when the ceo is also the chairperson of the board(e.g.cadbury committee,1992;asx,2003;standards australia international,2003).the appointment of the

58、ceo to the position of chair can lead to a concentration of power(beasley,1996)and possible conflicts of interest,resulting in a reduction in the level of monitoring.this leads to the following hypothesis:h1(b):earnings management is negatively associated with the separation of the roles of ceo and board chair.2.2.2audit committeein order to more efficiently perform their duties,boards of directors might delegate responsibilities to board committees.in relation to monitoring the financial discretion of management,it is the audit committee that is likely to provide shareholders with th