Effect of Female Directors on Earnings Management in Family Firms in Non Financial Companies in Pakistan

Obaid Ullah, Dr Naveed


This research. This research was designed to unearth the growth or reduction in
earnings management practices due to the role of female directors’ presence on
the board. For analysing the abovementioned phenomena, a sample of 37 family
firms for the period of 2010-17 was selected from the textile Industry. The data
was collected from annual reports. The statistical tools of Correlation and
Regression Analysis were used to combine the conclusions at a 5% level of
significance. We found that family firms with a zero-percentage presence of
female directors are controlled earnings management practices in Pakistan and
gradually it increases but the results become good for 40 or more percentage
female presence. The regression model with a p-value is 0.263 of female
presence which is greater than the significance level value of 0.05, it means that
the result is insignificant and we concluded that there is no significant effect of
female presence on the board. The result for female CEO is significant with a pvalue of 0.031 which is less than 0.05, the significance level. It means that female
CEO has a negative significant effect on earnings management as found. This
paper adds extensive knowledge to the female role on board diversity and its
effect on the manipulation of accounting disclosure.

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