Variables | Measures | Representative studies |
Dependent variable | ||
Earnings Management | Discretionary Accruals (DA) measured by the modified Jones model | |
Independent variables Audit Committee characteristics | ||
Audit Committee Size (ACSize) | It is a total number of audit committee Members. | |
Audit Committee Independence (ACIND) | The percentage of number of independent director over the total number of directors in the audit committee | |
Audit Committee Member’s Expertise (ACEXP) | The percentage of members with accounting or financial expertise on the audit committee. | |
Audit Committee Meetings (ACMT) | Number of meetings of audit committees per year. | |
Audit Committee Gender (ACG) | The percentage of female members in audit committee. | |
Control variables | ||
Firm size (Size) | Natural log of total assets. | |
Big 4 | An indicator variable equal to “1” if the auditor is a Big-4 firm (Price water house Coopers, Deloitte & Touche, Ernst& Young and KPMG), and “0” otherwise. | |
Block holder ownership (BOWN) | the proportion of outstanding shares held by the largest shareholder owning at least 5% of the outstanding shares in a corporation. | |