A Contingency Model for Impact of Board Structure on Earning Quality: Structural Equation Modeling Approach

Document Type : Research Paper

Authors

1 Assistant professor of accounting, Ilam university, Ilam, Iran

2 Associate professor of accounting, Tarbiat Modares university, Tehran, Iran

3 Professor of Management, Tarbiat Modares university, Tehran, Iran

Abstract

The review of literature on the theoretical foundations of corporate governance suggests that agency theory has been the dominant theoretical framework in this context. Some scholars, claiming that this theory has paid little attention to organizational factors, have drawn attentions to the use of contingency theory in the study of corporate governance. In this regard, this study aims to provide a contingency model for the effect of the board structure on earnings quality. The sample includes 103 firms listed in Tehran Stock Exchange during the period from 2011 to 2016. The structural equation modeling approach and Smart PLS software have been used for modelling. The results show that competition, business strategy and firm size, as contingency factors, have a positive and significant effect on the board structure. Also, the board structure has a mediating role in the relation between contingency factors and earnings quality, and the adaptation between these factors and board structure affects the quality of earnings. Therefore, in Tehran Stock Exchange, the effects of the board structure on the earning quality with regard to contingency factors can be explained in the form of a structured model. 

Keywords

References

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Empirical Research in Accounting
Volume 10, Issue 3 - Serial Number 37
November 2020
Pages 99-126

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History

  • Receive Date: 19 June 2018
  • Revise Date: 18 September 2018
  • Accept Date: 18 September 2018

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