Real earnings management, firm value, and audit committee expertise

Nizar S. Alshowaiman

International Journal of Business Forecasting and Marketing Intelligence, 2026, vol. 11, issue 2, 173-190

Abstract: The study's purpose is to assess the impact of real earnings management (REM) on firm value (FV). Further, it investigates the moderating role of audit committee expertise (ACEXP), which is represented by financial expertise for audit committee members (FIN.ACEXP) and industrial expertise for audit committee members (IND.ACEXP) in this relationship. The study used a quantitative method with 140 Saudi non-financial firms from 2011 to 2020. The findings concluded a positive impact of REM on FV. Additionally, this relationship was enhanced by ACEXP, where FIN.ACEXP weakened the positive impact of REM on FV. While IND.ACEXP strengthened the positive impact of REM on FV. The study has several implications for the theoretical explanation of the relationship between REM, FV, and ACEXP in the Saudi context. The study has useful implications for corporate governance (CG) in various economic sectors, policymakers, boards, firms, and stakeholders.

Keywords: audit committee financial expertise; audit committee industrial expertise; Saudi exchange; real earnings management; REM; Tobin's Q model. (search for similar items in EconPapers)
Date: 2026
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