The relationship between corporate governance, earnings management and financial performance in companies listed on the Tehran Stock Exchange

The purpose of this study is to investigate the role of corporate governance characteristics on earnings management and financial performance of companies listed on the Tehran Stock Exchange. The statistical population of the study is the companies listed on the Tehran Stock Exchange during the years 1390 to 1396 (2011-2017). In this study, the variables of CEO's tenure, reliance on debt, ownership focus, independence of the board of directors, duality of CEO's duties, and institutional ownership have been used to assess corporate governance. The statistical model of the study, using the estimated regression method and the research findings, indicates the existence of a negative and significant relationship between corporate governance and earnings management. There is also a significant inverse relationship between institutional ownership, debt reliance, and board independence with earnings management. The concentration of ownership and profit management does not have a significant relationship and there is a direct and significant relationship between the duration of the CEO's tenure and the duality of duty with the profit management. A significant and direct relationship was observed between corporate governance and financial performance. Institutional ownership, the term of office of the CEO and the independence of the board of directors also have a direct and significant relationship with financial performance, but there is no significant relationship between financial concentration and reliance on debt and financial performance. Also, there was an inverse relationship between the duality of the CEO's job and financial performance.