The impacts of audit committee expertise on real earnings management: Evidence from Hong Kong

This study examines the impacts of seven types audit committee expertise (accounting academic, auditing, finance CEO or director, other finance, industry and legal expertise) on real earnings management. 1054 firm-year observations are used in study. The sample firms collected from Hong Kong Hang Seng Composite Index between 2010 2015. Real management measured as abnormal cash flows, production costs, discretionary expenditures. Using dynamic panel difference GMM model that is robust for endogeneity caused by reverse causality, we find having strong more likely to have higher levels Overall, our findings support view accounting, experts committee, no matter whether they practical experience academic experience, encourage managers switch their strategies whilst CFO director constrains potential interest policymakers, professionals, boards directors, academics.