Variable | Definition | Measurement |
Dependent variable | ||
ABSDA: | Absolute Discretionary Accruals | Absolute Discretionary Accruals represent an unsigned Earnings Management proxy estimated by the Modified Jones Model |
Explanatory variables | ||
INDEP: | Board independence | Proportion of non-executive directors over the total number of directors |
FAMILY: | Family directors | Proportion of family directors over the total number of directors |
FEMALE: | Female directors | Proportion of female directors over the total number of directors |
FOREIGN: | Foreign directors | Proportion of foreign directors over the total number of directors |
DUALITY: | CEO duality | Dummy variable (1 if the chief executive officer is also chairman of the board, 0 otherwise) |
Control variables | ||
BIG4: | Audit firm size | Dummy variable (1 if audit firm is a Big4 firm, 0 otherwise) |
LEV: | Leverage | Ratio of (Total Long-Term Debt + Debt in Current Liabilities)/Total Assets |
ROA: | Return On Assets | Income Before Extraordinary Items to Total Assets |
SIZE: | Firm size | Total assets (logarithm) |