Corporate Governance Reforms Curb Earnings Manipulation in Taiwan
In Taiwan, companies following the Corporate Governance Best-Practice Principles (CGBPP) may have less deceptive handling of finances known as earnings management. The study found that having independent supervisors, financially knowledgeable independent directors, and choosing to form independent directorships can lead to less earnings manipulation. This effect became more significant after the CGBPP was established, showing that following these principles can help reduce the chances of messing with earnings.