Abstract:
The study aims to explore the impact of audit committee characteristics and gender diversity
on the earnings management of listed companies in Sri Lanka. The sample comprises 107
companies listed on the Colombo Stock Exchange (CSE) for the five years from 2017 to 2021.
The audit committee size, independence, financial expertise, and the number of audit
committee meetings proxy for audit committee characteristics while gender diversity is
measured by the number of female directors on the board. This study used discretionary
accruals as a signal of the presence of earnings management. The results reveal that audit
committee size and gender diversity have a negative effect on the earnings management
practices of listed companies. A low level of audit committee independence has a major effect
as a device in mitigating earnings management.
