Table 15 Variable definitions
From: Board of directors and earnings manipulation: evidence from regulatory change
Variables | Description | |
|---|---|---|
Dependent variables | ||
MCDA | Discretionary accruals calculated under McNichols, [48] model | Â |
REALEM | Aggregate Real activity Manipulation by adding abnormal production cost with abnormal cash flow form operation and abnormal discretionary expenses [49] | Â |
DIS ERM | abnormal discretionary expenses | Abnormal discretionary expenses estimated using [58] model |
RCFO | abnormal cash flow form operation | Abnormal cash flow form operation estimated using [58] model |
PRO RM | abnormal production cost | Abnormal production cost estimated using [58] model |
Board of directors variables | ||
BIND | Board Independence | Independent directors/ Size of the board |
BEXP | Board Expertise | Those directors who have accounting and finance related education/experience by size of the board |
BDIV | Board Female directorship | Female directors/Size of the board |
FD | Family directors | Family directors/Size of the Board |
BMEET | Board meetings | The number of the board meetings in a year |
BSIZE | Board Size | The number of directors in the board |
CEOD | CEO Duality | Dummy variable taking 1 if CEO’s holding the position of chairman 0 otherwise |
Control variables | ||
ACIND | Audit Committee Independence | Number of directors in audit committee/ Size of the Audit Committee |
ACEXP | Audit Committee Expertise | Those directors who have accounting and finance related education/experience by size of the audit committee |
BIG4 | BIG 4 Audit Firms | A firm audited by Big 4 audit firm will take 1 and others will take 0 |
ROA | Return on Assets | Earnings before tax/Total Assets[18] |
LEVE | Leverage | Short term& long term Debt/Total Assets |
FAGE | Firm Age | The age of the firm since its incorporation |
TANG | Tangibility | Fixed Assets/ Total Assets |
FSIZE | Firm Size | Natural log of Total Assets[62] |
LOSS(D) | Loss dummy | A Dummy variable which is taking the value of 1 if the firm is reporting loss in the annual report other wise 0 |
CFO | Cash flow from operation | Cash flow from operation/Total Assets |
SALES | Sales/Total assets | Revenues/Total Assets |
INV | Inventory/total assets | Inventory at the end of the period/Total Assets |