The Impact of Adherence to Corporate Governance Standards in Earnings Management and Financial Performance in Palestinian Companies Listed in Palestine Exchange. رسالة ماجستير

Abstract

This study examines impact of adherence to corporate governance standards in earnings management and financial performance among Palestinian companies listed in Palestine Exchange, study population includes all companies listed in exchange, with sample focusing in companies that met specific criteria from 2015 to 2022, diverse range of industrial companies formed study sample, representing various sectors including pharmaceuticals, food production, aluminum, paints, carton, and plastic industries, Modified Jones Model was used to measure earnings management practices, distinguishing between optional (discretionary) and non-optional accruals to assess extent to which companies engage in earnings management, Additionally, corporate governance factors such as board size, CEO duality, board independence, and presence of an audit committee were analyzed to understand their influence in earnings management practices. Data collection relied in detailed financial reports and publicly available documents, covering both dependent variables (earnings management) and independent variables (corporate governance factors), study employed rigorous statistical treatment process, including descriptive statistics, correlation analysis, and multiple regression analysis, results reveal that board independence significantly reduces earnings management, while CEO duality increases it, highlighting critical role of governance structures in mitigating managerial discretion, However, financial performance metrics demonstrate moderating effect, with ROA amplifying adverse impact of CEO duality and weakening protective influence of board independence, ROE, in other hand, enhances effectiveness of board independence and mitigates risks associated with CEO duality, These findings underscore importance of tailoring governance mechanisms to financial context of firms, emphasizing that governance and financial performance jointly influence earnings management practices, Based in these findings, several recommendations are made to strengthen corporate governance in Palestinian companies, including enhancing board structure and independence, increasing meeting frequency, separating CEO and chair roles, and reinforcing audit committee oversight, study provides insights into how adherence to corporate governance can reduce earnings management practices, thereby promoting transparency and supporting financial performance among companies in emerging markets.