Table 3

Variables measurement

VariableVariable representationMeasure
DAEMThe error term in the Dechow et al. (1995) model
DPODP of firmDividend per share/earnings per share
SIZEFirm sizeNatural logarithm of the total assets
DEBTDebt ratioLong-term debt divided by total assets
GROWSale growth of firmThe annual growth rate of sale revenue
CFOCash flows from operationsCash flows from operations divided by total assets
RSQRisk of a firmPrice of a share divided by earnings per share
ROEReturn on equityNet income over owners’ equity
LIQLiquidity of firmCurrent assets divided by current liabilities
ROAReturn on assetsIncome before extraordinary items divided by total assets
BMMarket-to-book ratioThe ratio of market value to book value
ACEXPThe expertise of audit committee membersProportion of audit committee members with accounting financial expertise
ACINDThe independence of audit committee membersProportion of independent directors on the audit committee
NUMBThe frequency of board meetingsThe number of meetings held by the audit committee
AUDAudit qualityDummy variable coded 1 if the firm’s auditor is a Big 4 accounting firm, 0 otherwise
CUMULCEO dualityDummy variable coded 1 if the CEO is also the board chair, 0 otherwise
TACABoard sizeThe number of directors on the board
CONCOwnership concentrationThe percentage of shares owned by the first shareholder

Source(s): Datastream

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