Investigating the Moderating Role of Board Gender Diversity in the Relationship Between Accounting Conservatism and Real Earnings Management in Companies Listed on the Tehran Stock Exchange

Alireza Nasiri Malek Kalayi

Authors

Alireza Nasiri Malek Kalayi MA, Department of Accounting, University of Mazandaran, Mazandaran, Iran https://orcid.org/0000-0001-6206-1309

Keywords:

accounting conservatism, real earnings management, board gender diversity, corporate governance, financial reporting quality

Abstract

The purpose of this study is to examine the relationship between accounting conservatism and real earnings management and to investigate the moderating role of board gender diversity in this relationship. The statistical population of the study includes companies listed on the Tehran Stock Exchange during the period from 2013 to 2022. After applying the required restrictions, 277 companies were selected as the research sample, comprising a total of 2,770 firm-year observations. In this study, panel data and a multivariate regression model were used to test the hypotheses. Moreover, to ensure the validity of the results, econometric diagnostic tests, including multicollinearity, heteroscedasticity, and autocorrelation tests, were conducted. The findings indicate that accounting conservatism has no significant relationship with real earnings management. In contrast, board gender diversity has a negative and significant effect on real earnings management, indicating the effective monitoring role of female board membership in reducing opportunistic managerial behaviors. The results also show that board gender diversity does not play a significant moderating role in the relationship between accounting conservatism and real earnings management. The findings of this study may be useful for investors, managers, and capital market regulatory bodies in evaluating financial reporting quality and strengthening corporate governance mechanisms.

References

[1] S. Ghorbani, "Analysis and Explanation of Financial Accounting Theory Based on the Conceptual Framework of the Financial Accounting Standards Board," Journal of Accounting and Management Auditing, vol. 53, pp. 37-53, 2025.

[2] I. Dadashi, "Board Governance Mechanisms and Misclassification of Operating Revenues and Expenses: An Application of Quantile-on-Quantile Regression," Accounting Advances, vol. 17, no. 1, pp. 115-147, 2025.

[3] D. A. Cohen and P. Zarowin, "Accrual based and real earnings management activities around seasoned equity offerings," Journal of Accounting and Economics, vol. 50, no. 1, pp. 2-19, 2010, doi: 10.1016/j.jacceco.2010.01.002.

[4] A. Nazemi, L. Darvish Farash, and S. M. Eslamzadeh, "The effect of revised accounting standards on earnings management and earnings quality," Audit Knowledge, vol. 15, no. 61, 2015.

[5] N. Triani and D. Tarmidi, "Firm value: Impact of investment decisions, funding decisions and dividend policies," International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9, no. 2, pp. 158-163, 2019.

[6] O. Bamari, M. Shoorvarzi, and Z. Noori, "Examining and Explaining the Relationship between Internal Audit and Profit Management," (in English), Journal of Management Accounting, vol. 14, no. 53, pp. 291-304, 2025.

[7] R. L. Watts, "Conservatism in accounting part I: Explanations and implications," Accounting Horizons, vol. 17, no. 3, pp. 207-221, 2003, doi: 10.2308/acch.2003.17.3.207.

[8] B. Francis and X. Martin, "Acquisition profitability and timely loss recognition," Journal of Accounting and Economics, vol. 49, no. 1-2, pp. 161-178, 2010, doi: 10.1016/j.jacceco.2009.09.003.

[9] W. Zhu, "The effect of conservatism on real earnings management," International Journal of Business and Social Science, vol. 3, no. 18, pp. 44-54, 2012.

[10] J. B. Kim and L. Zhang, "Accounting conservatism and stock price crash risk: Firm-level evidence," Contemporary Accounting Research, vol. 33, no. 1, pp. 412-441, 2016, doi: 10.1111/1911-3846.12112.

[11] H. R. Malek Hosseini, M. Arab Salehi, and D. Foroughi, "The impact of board characteristics through modern management accounting techniques on firms' financial performance," Management Accounting and Auditing Knowledge, vol. 14, no. 54, pp. 17-36, 2025.

[12] F. Ghiyour, G. Mansourfar, and A. Ali Akbarlou, "Investigating the relationship between audit committee characteristics and earnings quality with the moderating role of managerial overconfidence: A structural equation modeling approach," in 2nd International Conference on Modern Challenges and Solutions in Industrial Engineering, Management, and Accounting, Damghan, 2021.

[13] R. B. Adams and D. Ferreira, "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, vol. 94, no. 2, pp. 291-309, 2009, doi: 10.1016/j.jfineco.2008.10.007.

[14] B. Srinidhi, F. A. Gul, and J. Tsui, "Female directors and earnings quality," Contemporary Accounting Research, vol. 28, no. 1, pp. 137-160, 2011, doi: 10.1111/j.1911-3846.2010.01080.x.

[15] D. Dobija, A. Hryckiewicz, M. Zaman, and K. Pulawska, "Critical mass and voice: Board gender diversity and financial reporting quality," European Management Journal, vol. 40, no. 1, pp. 29-44, 2022, doi: 10.1016/j.emj.2021.02.005.

[16] S. Alves, "Gender diversity on corporate boards and earnings management: Evidence for European Union listed firms," Cogent Business & Management, vol. 10, no. 1, p. 2193138, 2023, doi: 10.1080/23311975.2023.2193138.

[17] E. F. Attia, S. Yassen, A. Chafai, and A. Qotb, "The impact of board gender diversity on the accrual/real earnings management practice: Evidence from an emerging market," Future Business Journal, 2024, doi: 10.1186/s43093-024-00307-7.

[18] R. E. Bedeir, "The governing role of board gender diversity on conditional accounting conservatism and executive remuneration: Performance-based versus equity-based remunerations," Future Business Journal, 2024, doi: 10.1186/s43093-024-00377-7.

[19] H. Muhammad, F. Paolone, and S. Migliori, "Board gender diversity and accounting conservatism: The role of corporate social responsibility," Sustainability Accounting, Management and Policy Journal, 2024, doi: 10.1108/SAMPJ-11-2023-0835.

[20] Y. Hassas Yeganeh and G. Barzegar, "The theoretical foundations of corporate social responsibility and its research paradigm in the accounting profession," Management Accounting, vol. 7, no. 22, 2014.

[21] B. H. Baltagi, Econometric Analysis of Panel Data, 6th ed. Springer, 2021.

[22] J. M. Wooldridge, Econometric Analysis of Cross Section and Panel Data, 2nd ed. MIT Press, 2010.