Board of directors and earnings management: conventional and Islamic banks

Ahmad Abu-Dawleh*, Nadine Lybaert, Tensie Steijvers, Mieke Jans

*Corresponding author for this work

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1 Citation (Web of Science)


This study examines how the board of directors (BOD) of Islamic banks (IBs) might affect earnings management differently, compared to BOD of conventional banks (CBs). Our results indicate that banks in the MENA region that promote BOD independence incur less earnings management. Distinguishing between CBs and IBs, we document higher loan quality and credit policy at IBs. Moreover, smaller BOD size and board independence decrease earnings management at IBs. Findings suggest that agency theory might not accommodate the agency conflicts at IBs, since it neglects stakeholders' behavioural patterns. Thus, these results suggest the need to shape directors' financial acumen at IBs.

Original languageEnglish
Number of pages17
JournalAsia - Pacific Journal of Accounting & Economics
Publication statusE-pub ahead of print - 3 Mar 2021


  • Board of directors
  • board independence
  • board size
  • earnings management
  • Islamic and conventional banks

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