Political connections of independent directors and earnings quality: The case of French firms
研究了法国公司独立董事的政治关联对盈余质量的影响，发现这类关联会降低盈余质量，导致更高的可操控应计和真实活动操纵。
• Our study provides direct evidence on how politically connected independent directors affect the quality of firms' accounting earnings. • To the best of our knowledge, our paper is the first study on the association between the political connections of independent directors and earnings management. • The results of this study provide new understanding of how corporate governance mechanisms interact with firms’ political connections to affect the financial reporting quality. This paper examines the impact of political connections of independent board directors on earnings quality. We used two proxies of earnings quality, namely, discretionary accruals and real earnings management. Based on a sample of 1,936 firm-year observations from 2012 to 2022, our results reveal that firms with politically connected independent directors are more likely to display lower earnings quality in higher discretionary accruals and greater real activities manipulation. These results suggest that the monitoring role of independent directors in constraining earnings management practices, as emphasized by the agency theory, may be compromised by political connections.