A Contingency Model for the impact of board structure on earning quality: Structural Equation Modeling Approach

The review of literature on the theoretical foundations of corporate governance suggests that agency theory has been the dominant theoretical framework in this context. Some scholars, by proposing the argument that this theory has paid little attention to organizational factors, have drawn attention to the use of contingency theory in the study of corporate governance. In this regard, this study aims to provide a contingency model on the effect of board structure on earnings quality. The sample includes 103 firms listed at Tehran Stock Exchange during the period from 1390 to 1395. The structural equation modeling approach and Smart PLS software have been used for modelling. The results showed that competition, business strategy and company size as contingency factors have a positive and significant effect on the structure of the board of directors. Also, the board structure has a mediating role in the relationship between contingency factors and earnings quality, and the adaptation between these factors and board structure affects the quality of earnings. Therefore, in Tehran Stock Exchange the effects of the board structure on the earning quality with regard to contingency factors can be explained in the form of a structured model.