THE EFFECT OF GENDER DIVERSITY IN TOP MANAGEMENT POSITIONS ON EARNING MANAGEMENT

The goal of this dissertation is to investigate the relationship between gender diversity and earnings management on listed companies. To that end, annual panel data for European firms over the period 2013 to 2020 was used. The final sample is comprised of 767 listed companies from European Union countries. Earnings management based on discretionary accruals were calculated according to the modified Jones model. Gender diversity was calculated by the percentage of women as board members and women managers from the Eikon Database. The results do not find statistical evidence that women on board impact earnings management, neither to increase or decrease earnings. However, the results showed a positive relationship between women managers and discretionary accruals when the goal is to increase earnings. The additional analyses showed that this positive relationship is only statistically significant for the less developed countries of EU, the ones below the government effectiveness index mean. These findings are particularly important for the society as it concerns a society problem and it is also relevant for managers, decision-makers and recruiters.