Earnings Management, Corporate Governance and Firm Performance

This paper studies the relationship between earnings management, corporate governance and firm performance by investigating the data of 94 Vietnamese listed companies in the period from 2016 to 2020. The extent of earnings management will be measured by two approaches, which are accrual-based earnings management (AEM) and real earnings management (REM). There is evidence that real activities manipulation is more effective on generating higher firm performance than accrual-based approach. Furthermore, this paper shows evidence that, auditor quality and the extent of leverage ratio are negatively correlated to both types of earnings management; hence, lower auditors’ quality and leverage ratio will result higher firm performance