Master Thesis Online
The Impact of Board Independence on Earnings Management and Audit Quality
Pan, Chenghao 
Promotor(s) :
Torsin, Wouter
Date of defense : 31-Aug-2026/4-Sep-2026 • Permalink : http://hdl.handle.net/2268.2/26948
Memoire_ChenghaoPan_s211740.pdfDetails
| Title : | The Impact of Board Independence on Earnings Management and Audit Quality |
| Translated title : | [fr] L'impact de l'indépendance du conseil d'administration sur la gestion des résultats et la qualité de l'audit |
| Author : | Pan, Chenghao
|
| Date of defense : | 31-Aug-2026/4-Sep-2026 |
| Advisor(s) : | Torsin, Wouter
|
| Committee's member(s) : | Fink, Adrien |
| Language : | English |
| Number of pages : | 57 |
| Discipline(s) : | Business & economic sciences > Accounting & auditing |
| Institution(s) : | Université de Liège, Liège, Belgique |
| Degree: | Master en sciences de gestion, à finalité spécialisée en Financial Analysis and Audit |
| Faculty: | Master thesis of the HEC-Ecole de gestion de l'Université de Liège |
Abstract
[en] This thesis examines whether board independence and audit committee financial expertise are associated with earnings management and auditor choice among 1,265 US firms listed on the NYSE and NASDAQ Global Market between 2020 and 2025. Discretionary accruals are estimated via the Modified Jones Model and tested against board characteristics using OLS regression, while a logistic regression tests board independence against Big Four auditor engagement.
Board independence is negatively associated with discretionary accruals and positively associated with Big Four auditor engagement, both results robust to lagged specifications, the latter the strongest finding of the thesis. Financial expertise shows no significant effect, attributable to near-total absence of variation in the sample. The well-documented link between Big Four auditor choice and lower discretionary accruals weakens substantially once board independence and firm characteristics are controlled for, suggesting it partly reflects correlated governance characteristics rather than a distinct audit-quality effect.
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