Correlation between the Presence of Accountants in the Board of Directors and Discretionary Accruals: The Case of Philippines

This study examines how the presence of an accountant in the Board

of Directors of a particular corporation is correlated to the

discretionary accruals recognized in its financial statements. The

discretionary accruals of the top twenty publicly listed firms in the

Philippines from years 2009 to 2014 were calculated using the Healy

and Modified Jones Models, and board compositions of the firms were

evaluated and reviewed. Thereafter, a correlation analysis is applied

to determine whether or not there is an association between the two

variables. Results suggest that the amount of income-decreasing

discretionary accruals and total discretionary accruals are negatively

correlated to the percentage of accountants in the board, while there

is no correlation between the percentage of accountants in the board

and income-increasing discretionary accruals recognized in the

financial statements.

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