BOARD OF DIRECTORS STRUCTURE AND EARNINGS MANAGEMENT: BIST MANUFACTURING CASE

The aim of this study is to investigate association between firms' board structure (independent members, audit comittee, female membership and board of directors size) and earnings management. For the purpose of investigating associations four different earnings management models were used. In addition, four hypotheses were tested in the context of the study. Within the scope of the study, data covering the years 2012 - 2016 belonging to the firms operating in the BIST Manufacturing Sector were used. According to results there is a relationship between the proportion of independent members in the board and earnings management practices based on accrual and sales manipulation. Obtained results confirm that the increase in the proportion of female members on the board reduces earnings management practices based on cash flow and sales manipulation. There is also evidence that an increase in the size of the board reduces earnings management practices based on cash flow and income manipulation. There is no supporting evidence that the proportion of audit comittee members reduces earnings management practices.