The Role Of Corporate Governance In Earrings Management In Public Listed Companies In India

Abstract

This study investigates the role of corporate governance in mitigating earnings management practices among publicly listed companies in India. Earnings management, which involves manipulation of financial reports to mislead stakeholders, has been a significant concern in India, highlighted by cases such as the Satyam scandal. The research aims to assess how corporate governance mechanisms, including internal controls, can enhance financial transparency and reduce fraudulent reporting. Using a mixed-method approach with primary data from surveys and secondary literature, the study found that strong corporate governance and robust internal control systems play a vital role in limiting earnings manipulation and fostering investor confidence. While corporate governance was confirmed to significantly reduce earnings management, its relationship with financial leverage remains complex and less conclusive. The study recommends that Indian corporations strengthen their corporate governance frameworks and internal controls to uphold ethical standards and protect stakeholder interests.

 Keywords:  Corporate governance, earnings management, internal control systems, financial transparency, Satyam scandal, India, financial reporting, fraud prevention, stakeholder trust