Effects of borrowing costs, firm size, and characteristics of board of directors on earnings management types: a study at Borsa Istanbul

Using data for firms at Borsa Istanbul in Turkey, this study determines how borrowing costs, firm size, and board size and independency affect choice of earnings management (EM) type (efficient or opportunistic), in an attempt to expand the somewhat limited EM literature. The results of the ordinary least squares hypothesis testing show that the firms practice efficient EM, and that highly leveraged firms and those with a high proportion of independent non-executive board members use EM less than those with a low proportion, while large firms and those with large boards use EM more than those with small boards do.