Abstract:
The core purpose of this research is to explore the causal influence among CG
mechanism, accounting frauds and earnings multiple. For this purpose, board size, board
meetings, audit committee size, audit committee meetings, and managerial ownership are
taken as the measures for corporate governance mechanism. We have used ROE and ROA
as the proxies for earnings multiples. We have measured accounting frauds through
Modified Jones model. We have used 6 years’ data from 2013-2018 of top 15 nonfinancial
firms listed in PSX based on their outstanding shares. The data we have used is
panel data. We have extracted the data from Data stream and annual reports of the selected
firms. We have used OLS, random effect GLS and fixed effect GLS in STATA 15 for the
empirical investigation of the data. According to OLS our results show that board
meetings has positive and significant impact on ROA. Whereas board size has positive
yet insignificant impact on ROE and board meetings and managerial ownership have
positive significant impact on ROE. But only board size has positive significant impact
on Earning management.
