The Impact of Integration between the Characteristics of the Board of Directors and Audit Committees in Limiting Earnings Management in Libyan Commercial Banks

Abstract

The study aims to determine the impact of the integration between the characteristics of the board of directors and audit committees on earnings management in Libya، through the characteristics of the board of directors and audit committees، which limit the practices of earnings management represented in the independence of the board of directors and audit committees، the scientific efficiency of members of the board of directors and audit committees، the size of the board of directors and audit committees، meetings of the board of directors and audit committees، and the bank expertise of members of the board of directors and audit committees. Objective of this study: The objective of this study was achieved. The deductive approach was followed. A questionnaire was designed as a tool for collecting data from the study population in two categories. The first category represented the board of directors and audit committees of Libyan commercial banks، and the second category represented the external auditors registered in the Central Bank of Libya.

The use of both descriptive and inferential statistics methods to analyze the data and draw conclusions. The hypotheses of the study were tested through the Simple Liner Regression Model، the Multiple Liner Regression Model، the Multicollinearity Test and the Pearson Correlation.The results of the descriptive analysis of the variables of the study revealed that all individuals in the sample are males، which means، the absence of a female component، and it turns out that three-quarters of the study sample are holders of a bachelor’s degree، which indicates that the study sample is not interested in continuing education and obtaining higher educational degrees.

The results of the study revealed that the sample members have sufficient experience and different specializations، which contributes to confidence in the results of this study. Based on the aforementioned results، the study recommends the formation of an effective board of directors through that the majority of board members and audit committees are independent and non-executive members، and that most of them have financial، legal and technical expertise related to the company’s business as well as professionalism and integrity. Fulfillment by the board of directors and committees Reviewing the requirements of the Libyan Banking Governance Manual when appointing members of the board of directors and audit committees.