The Role of Corporate Governance in Mitigating Earnings Management: An Applied Study on Egyptian Pharmaceutical Corporations

Abstract

This study aims at exploring the role of corporate governance in mitigating earnings management in Egypt, This was accomplished through reviewing the literature and previous studies related to corporate governance and earnings management, then analyzing the relationship between the characteristics of the corporate governance and the possibility of mitigating earnings management at the Pharmaceutical corporations listed at Egyptian Exchange. The study concluded that there is an adverse relationship between corporate governance and earnings management at Egyptian Pharmaceutical corporations; thus, if the level of the corporate governance increases, it will mitigate earnings management at the corporation. Finally, the study concluded the importance of the corporate governance and the necessity of improving the regulations guide and standards of corporate governance in Egypt in line with the Egyptian economic environment and maximizing the benefit of applying corporate governance.