TY - JOUR TT - The Effect of Corporate Governance Applications on Earnings Management: An Application on Istanbul Stock Exchange AU - Yavuzaslan, Seda AU - Kalmış, Halis PY - 2016 DA - June JF - Yönetim Bilimleri Dergisi PB - Çanakkale Onsekiz Mart Üniversitesi WT - DergiPark SN - 1304-5318 SP - 353 EP - 384 VL - 14 IS - 27 KW - Kâr Yönetimi KW - Kurumsal Yönetim KW - İhtiyari Tahak N2 - Earnings managements applied for many years in the framework of flexible accounting plocies of the companies has shaken the confidence towards business financial reports. In this framework, earnings management applications are considered as one of the basic factors which prevents earnings management applications and guarantee the accuracy of the business financial reports. This study examines the relationship between earnings management and the internal corporate governance mechanisms of the companies listed at the İstanbul Stock Exchange between the years 2005-2010. First of all, discretionary accruals were calculated. Four different discretionary accrual models have been employed to be able to calculate earnings management. After the fluxional varience problems of these models had been resolved, the models were anticipated by pooled balanced panel data analysis technique. And Larcker Richardson model has been determined as the best accrual model measuring earnings management in Turkey.Afterwords this study were analysed the relationship between earnings management and the internal corporate governance mechanisms According to the analysis results internal corporate governance mechanisms that reduce earnings management applications in company were determined as non-executive members of the board of directors and the audit committee and audit committee size. And asset size has been determined as increase of earnings management applications CR - Al-Abbas, Mohammed A. “Corporate Governance and Earnings Management:An Empirical Study of the Saudi Market”, The Journal of American Academy of Business, Cambridge, Volume:15,No:1,2009,s.301-310. CR - Akmut, Ö., Aktas, R., Binay, H. S. Öngörü Teknikleri ve Finans Uygulamaları.,Siyasal Kitabevi, Anakara 1999. CR - Aksu, Mine ; Arman Kösedadağ. “İstanbul Menkul Kıymetler Borsası Şirketlerinin Şeffaflık ve Kamuyu Bilgilendirme Bakımından Derecelendirilmesi”, I. Ulusla- rarası Muhasebe Denetimi Sempozyumu ve VII. Türkiye Muhasebe Denetimi Sempozyumu,2005, s.217-241. CR - Alexander, David. “The Impact Of Three Board Characteristics, Moderated By Ceo Attributes, On Earnings Management”, Doctor Of Business Administration, 2010, H. Wayne Huizenga School of Business and Entrepreneurship Nova So- utheastern, UMI Dissertation Services.University. CR - Ayarlıoğlu, Mehmet. “Kar Yönetimi (Earning Management) Uygulaması ve İMKB’de Test Edilmesi”,(Yayınlanmamış Doktara Tezi,Hacettepe Üniversitesi, 2007), s.1-280 . CR - Beasley, Mark S. “An Empirical Analysis Of The Relation Between The Board Of Director Composition And Financial Statement Fraud”, The Accounting Revi- ew, Volume:71, 1996, s.443–465. CR - Cohen, Jeffrey R., Krishnamoorthy Ganesh; Arnold Wright .“The Corporate Go- vernance Mosaic and Financial Reporting Quality”, Journal of Accounting Li- terature, Volume 23, 2004, s.87-152. CR - Copeland, Ronald M. “Income Smoothing”, Journal of Accounting Research, Sayı:6; Empirical Research in Accounting, Selected Studies 6 (Supplement),1968, s.101-116. CR - Davidson, Ryan; Jenny Goodwin; Pamela Kent. “Internal Governance Structures and Earnings Management, Working Paper No. 2003-009, December 2003,s.1- 34. CR - Dechow, Patricia M.; Douglas J. Skinner. “Earnings Management: Reconciling the Views of Accounting Academics, Practitioners and Regulators”, Accounting Horizons, Vol.14 No:2, 2000,s.235-250. CR - Dechow, Patricia M.; Richard G. Sloan; Amy P. Sweeney. “Detecting Earnings Ma- nagement”, The Accounting Review, Vol. 70, No.2, 1995, s.193-225 CR - Dechow, P. M., Sloan, R. G. Sweeney, Amy. “Causes And Consequences Of Ear- nings Manipulation: An Analysis Of Firms Subject To Enforcement Actions By The SEC. Contemporary Accounting Research ,Vo.13, No.1,1996, s.1 - 36. CR - Demirkan, Sabahattin; Harlan Platt. “Financial Status, Corporate Governance Qu- ality, And The Likelihood Of Managers Using Discretionary Accruals”, Acco- unting Research Journal Vol.22, No. 2, 2009 , s.93-117. CR - Denis, Diane K. ; John J. McConnell. “International Corporate Governance” Journal of Financial and Quantitative Analysis, Vol. 38 No.l, 2003,s. l-37. CR - Grasso, Lawrence P.; Patricia A. Tilley; Richard A. White, “The Ethics of Earnings Management: Perceptions After Sarbanes-Oxley”, Management Accounting Quarterly, Autumn, Vol.11 Issue. 1,2009, s.45-69. CR - Hamdan, Allam M. M., Al-Hayale, Talal H. Al-Hayale and Emad M. Aboagela. “The Impact of Audit Committee Characteristics on Accounting Conservatism: Additional evidence from Jordan”, Journal of King Saud University – Admi- nistration Sciences. KSA. , Vol.24, No. 1 2012,s. 1-15. CR - He Liyu, Sue Wright, Elaine Evans and Susan Crowe. “What makes a board inde- pendent? Australian evidence”, Accounting Research Journal, Vol. 22 No: 2, 2009,s.144 – 166. CR - Healy, Paul, M. “The Effect of Bonus Schemes on Accounting Decisions,” Journal of Accounting and Economics, Vol.7, April 1985, s.85-107. CR - Huang, P.; Timothy, J. Louwers; Jacquelyn S. Moffitt; Yan, Zhang “ Ethical Mana- gement, Corporate Governance, and Abnormal Accruals”, Journal of Business Ethics, Vol.83,2008, 469–487. CR - Hutchinson, Marion . “Governance Issues in Accounting”, Accounting Research Journal, Vol.22,Issue 2, 2009,s. 89-92. CR - Jaggi, Bikki; Sidney Leung; Ferdinand Gul. “Family Control, Board İndependence And EarningsManagement: Evidence Based On Hong Kong Firms”, Journal Of Accounting And Public Policy, Vol. 28, No. 4, 2009,s.281-300. CR - Jensen, Michael C. “The Modern Industrial Revolution, Exit, and the Failure of In- ternal Control Systems”, The Journal of Finance, Vol.48 , No.3, 1993, s.831-880. CR - Jones, J.Jennifer. “Earnings Management During İmport Relief İnvestigations”, Jo- urnal of Accounting Research, Vol. 29,No.2, 1991,s.193-228. CR - Karaibrahimoğlu,Yasemin, “The Role Of Corporate Governance On Earnings Management:Quarterly Evidence From Turkey, (Doktora Tezi, İzmir Ekonomi Üniversitesi) 2010,s. 1-342. CR - Keefe,Timhttp://www.investopedia.com/university/accounting/earningsquality/ earnings2.asp (12.02.2013) CR - Kothari S.P., Andrew Leone and Charles E. Wasley. “ Journal of Accounting and Economics”, Vol. 39, No: 1, 2005,s.163-197 CR - Larcker, David F.; Scott A. Richardson. “ Fees Paid to Audit Firms, Accrual Choi- ces and Corporate Governance”, Journal of Accounting Research , Volume:42, Issue:3.2003, s.625-658. CR - Lev, Baruch. “Corporate Earnings: Facts and Fiction”, The Journal of Economic Perspectives, Spring, Vol.17, No.2,2003,s. 27-50. CR - Levitt, Arthur, (1998), “The Numbers Game”, Speech at New York University http://www.sec.gov/news/speech/speecharchive/1998/spch220.txt (26.03.2011) CR - Maggi,Giovanni; Andres Rodriguez Clare. “Costly Distortion of Information in Agency Problems”, The Rand Journal of Economics, Vol.26,No.4,1995,s.675-689. CR - Mcmullen, Dorothy Ann. “Audit Committee Performance: An Investigation of the Consequences Associated with Audit Committees”, Auditing: A Journal of Practice & Theory, Vol.15, No.1, Spring 1996, s.87-103. CR - Mulford, Charles. W. ; Euqene. E. Comiskey. The Financial Numbers Game: Detec- ting Creative Accounting Practices, John Wiley & Sons Inc., USA ,2002, http:// books.google.com.tr/ CR - Noronha, Carlos; Yun Zeng; Gerald Vinten. “Earnings Management in China: An Exploratory Study”, Managerial Auditing Journal, Vol.23, No.4, 2008, s.367 CR - Ocak, Murat “Kurumsal Yönetişim Bileşenlerinin Tahakkuk ve İşlem Esaslı Kar Yönetimi Üzerine Etkileri ve Bir Uygulama” (Basılmamış Doktara Tezi, İstan- bul Üniversitesi) ,2013, s. 1-243. CR - Önder, Şerife. “ İşletmelerin Kar Yönetimi Uygulamalarında Kurumsal Yönetim Yapılarının Etkisi İMKB üzerine Bir Uygulama”,( Basılmamış Doktara Tezi, Kütahya Üniversitesi) ,2013,s.1-226. CR - Peasnell K.V.; P. F. Pope ; S. Young “ Board monitoring and earnings management: Do outside directors influence abnormal accruals?”, Journal of Business Finan- ce & Accounting, Vol. 32 , 2005, s.1311-1346. CR - Pornupatham, Sompong, “An Empirical Examination of Earnings Management, Audit Quality and Corporate Governance in Thailand: Perceptions of Auditors and Audit Committee Members”, Unpublished PhD Thesis, 2006,Cardiff Uni- versity, United Kingdom CR - Rezaee, Z. Financial Statement Fraud Prevention and Detection, John Wiley&Sons Inc.2002. http://books.google.com.tr/ (Erim Tarihi : CR - Richardson, Scott.; Richard G.Sloan; Mark T. Soliman; İrem Tuna. “ Accrual Re- liability, Earnings Persistence and Stock Prices”, Journal of Accounting and Economics, Vol.39, 2005, s.437- 485. CR - Saleh, Norman,M.; Takiah M. Iskandar; Mohd Mo. Rahmat. “ Audit Committee Characteristics And Earnings Management: Evidence From Malaysia”, Asian Review of Accounting, Vol.15 No.2, 2007, s.147-163. CR - Scarbrough D.Paul; Dasaratha V. Rama; K. Raghunandan. “Audit Committee Com- position And Interaction with Internal Auditing: Canadian Evidence”, Acco- unting Horizons, Vol.12,No.1, 1998,s.51-62. CR - Securities and Exchange Commission, Annual Report (Washington, DC: Securities and Exchange Commission, 1999) http://www.sec.gov/pdf/annrep99/ar99full. pdf . (Erişim Tarihi CR - Shen, Chung-Hua and Hasiang-Lin Chih. “Investor Protection, Prospect Theory, and Earnings Management: An International Comparison of the Banking In- dustry”, Journal of Banking and Finance, Vol.29,2005,s.2675–2697. CR - Siregar S. Veronica; Sidharta Utama. “Type Of Earnings Management And The Ef- fect Of Ownership Structure, Firm Size, And Corporate-Governance Practices: Evidence From Indonesia” The International Journal Of Accounting ,Vol. 43, 2008,s. 1–27. CR - SPK, (2005)Kurumsal Yönetim İlkeleri Rehberi, Şubat 2005. CR - SPK, E-Veri Bankası, 2010, http://www.spk.gov.tr/apps/eVeri/index.aspx? subme- nuheader=-1 CR - Stolowy, Hervé; Gaétan Breton. “Accounts Manipulation: A Literature Review and Proposed Conceptual Framework”, Review of Accounting & Finance, Vol.3, No.1, 2004,s.5-64. CR - Sun, L. Rath, S. . The Effect of Firm Performance on Modeling Discretionary Accruals:An Evaluation of Accrual Models. Macao International Symposium On Accounting And Finance,November 21 – 24, 2011, Venue: Macao Poly- technic Institute, Macao, China, http://www.macaoafa.org/proceedings/index. php/ mafa/issue/view/2 CR - Thiruvadi, Sheela and Hua-Wei Huang “Audit Committee Gender Differences And Earnings Management” Gender in Management: An International Journal, Vol. 26 Iss: 7, pp.483 - 498 CR - Xie, Biao, Wallace N. Davidson; Peter J. DaDalt. “ Earnings management and cor- porate governance: the role of the board and the audit committee”. Journal of Corporate Finance, Vol. 9, No. 3, 2003, s.295-316. CR - Weber Margaret Liebenow, Executive Equity Incentives, Earnings Management and Corporate Governance, MBA, Presented to the Faculty of the Graduate School of The University of Texas at Austin. CR - Yang, J. S., Krishnan, J. Audit Committees And Quarterly Earnings Management. International Journal of Auditing,Vol. 9, No.3,2005,s.201-219. CR - Yermack, David. Higher Market Valuation Of Companies With A Small Board Of Directors. Journal of Financial Economics, Vol.40, No.2, 1996, s.185-221. CR - Yu, Frank. Analyst Coverage and Earnings Management. Journal of Financial Eco- nomics. Vol. 88, 2008,s.245-271. CR - Zahra, Shaker A. and John A. Pearce . “Boards Of Directors And Corporate Finan- cial Performance: A Review And İntegrative Model”, Journal of Management, Vol.15, 1989,s.291–334. CR - http://www.myexecutive.com.tr/icerik.asp?lng=tr&CID=22). UR - https://dergipark.org.tr/tr/pub/comuybd/issue//533911 L1 - https://dergipark.org.tr/tr/download/article-file/660493 ER -