Description of variables
| Variable Name | Explanation |
|---|---|
| Board _ind. | Reflects the independence of the board. It is measured as the proportion of independent directors to the total number of directors on the board |
| Board diligence | Denotes the participation of independent directors in the board meetings and is measured as the percentage of board meetings attended by the independent directors on the board |
| Board_size | The number of directors on the board |
| Board activity | The frequency of board meetings conducted in a year |
| Board busyness | Measured as the number of independent directors with a minimum of four directorships in public-listed companies |
| AC_dil | Denotes the participation of independent directors in the audit committee meetings and is measured as the percentage of audit committee meetings attended by the independent directors |
| AC_ind | Reflects the independence of the audit committee. It is measured as the proportion of independent directors to the total number of directors on the audit committee |
| AC_size | Total number of directors on the audit committee |
| Firm age | Measured by the number of years of incorporation of the firm |
| Leverage | Financial leverage of the firm |
| MVBV | Ratio of market value to book value |
| Firm size | Measures size of the firm measured as log of total assets |
| Profitability | Measure of firm profitability and is measured as EBITDA as a percentage of sales |
| Absolute ΔEPS | Measures absolute change in prior years’ earnings |
| DAC | It is measured by the absolute value of residual from Equation (2). It is an inverse measure of earnings quality |
| Variable Name | Explanation |
|---|---|
| Board _ind. | Reflects the independence of the board. It is measured as the proportion of independent directors to the total number of directors on the board |
| Board diligence | Denotes the participation of independent directors in the board meetings and is measured as the percentage of board meetings attended by the independent directors on the board |
| Board_size | The number of directors on the board |
| Board activity | The frequency of board meetings conducted in a year |
| Board busyness | Measured as the number of independent directors with a minimum of four directorships in public-listed companies |
| AC_dil | Denotes the participation of independent directors in the audit committee meetings and is measured as the percentage of audit committee meetings attended by the independent directors |
| AC_ind | Reflects the independence of the audit committee. It is measured as the proportion of independent directors to the total number of directors on the audit committee |
| AC_size | Total number of directors on the audit committee |
| Firm age | Measured by the number of years of incorporation of the firm |
| Leverage | Financial leverage of the firm |
| MVBV | Ratio of market value to book value |
| Firm size | Measures size of the firm measured as log of total assets |
| Profitability | Measure of firm profitability and is measured as EBITDA as a percentage of sales |
| Absolute ΔEPS | Measures absolute change in prior years’ earnings |
| DAC | It is measured by the absolute value of residual from |
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