Board Characteristics and Earnings Management in Vietnam

This study aims to examine the impact of board characteristics on earnings management of listed companies on Vietnamese stock market. This research has employed a sample of Vietnamese listed companies in the period from 2016 to 2020 listed on Vietnam stock market. The study uses discretionary accruals (DA) as a proxy for the earnings management. The adjusted Jones model of Kothari et al. (2005) was applied to recognize DA of these companies. The study also employes fixed effect model through using panal data framework in order to control for time-variant endogeneity. The study found that board size has a positive relationship with earnings manipulation. Board independence and board share ownership are negatively associated to earnings manipulation. However, the study figured out a negative association between CEO duality and earnings management along with a positive association between board financial expertise and earnings management, which are not supported in our research hypotheses. The findings are important to policy-makers and investors by providing them a broaden viewpoints of producing well-defined policies, using useful information to evaluate the firm‟s performance, and monitoring the earnings management actions of managers.