Gender Diversity and Earnings Management: A study on Norwegian Firms
MetadataShow full item record
- Master of Science 
Due to the ethical and moral complexities associated with earnings management, the examination of gender differences has generated interest in relation to the quality of earnings reporting. However, the available studies examining the association between earnings management and gender diversity are limited, and the existing research has yielded different conclusions about whether gender has an impact on earnings management practices. In this study, we aim to investigate whether gender serves as an explanatory variable in earnings management practices, with a specific focus on Norwegian firms. Hence, our research question is: “Is the gender of the CEO and the number of female directors linked to earnings management in Norwegian firms?”. Our objective is to enhance the understanding of the potential relationship between the gender of the CEO and earnings management. Further, we examine whether the number of female directors impacts earnings management practices. Based on a panel of Norwegian firms from the period 2009 to 2015, we utilize different versions of the Jones model to identify discretionary accruals as a measure of earnings management and to further examine the effect of female CEOs and directors on discretionary accruals. The structure of the empirical analysis and method is motivated by a study executed by Arun et al. (2015) who examines UK firms. Our findings suggest a statistically significant association between the gender of the CEO and income-decreasing earnings management. This implies that female CEO engage in more conservative accounting practices. However, our findings do not indicate a statistically significant association between the number of female directors and income-decreasing earnings management, which implies that the association discovered is not robust enough to make definite conclusions. Further, we explore how the relationship between gender diversity and earnings management is impacted by the variations of different leverage levels. The findings indicate a potential relationship between both gender diversity measures and income-decreasing earnings management. However, lack of statistical significance on the main independent variables makes it hard to draw concrete conclusions.
Masteroppgave(MSc) in Master of Science in Business, Accounting and business control - Handelshøyskolen BI, 2023