Board Characteristics Effect on Cost Stickiness Using Earnings Management as a Mediating Variable "Evidence from Egypt" Associate Professor of Accounting College of Management and Technology Arab Academy for Science, Technology and Maritime Transport

Abstract

Purpose: This research demonstrates the impact of board characteristics on the cost stickiness of companies in various Egyptian industries, and how the earnings management perspective will increase the cost stickiness through managerial decisions that are mainly directed to reflect a better estimate for their firm' performance and earnings by adjusting resources costs.

Design/methodology/approach: The ordinary least squares (OLS) used to investigate the behavior of selling, general and administrative cost, and the influence of board characteristics (corporate governance mechanisms: board size, board independence, and CEO duality) to reduce cost stickiness using earnings management as an intermediary variable and firm size and financial performance as control variables in a sample of 41 Egyptian active publicly traded companies. Data is obtained from the financial statements published between 2015-2019 and the multiple linear regression equations utilized to analyze the data; the board characteristics variables are identified from the section of governance in the annual reports.