Suyon Kim
This study examines the relationship between the voluntary disclosure of water risk and earnings management. The result of the analysis shows that the firms that reveal their true environmental status regarding water are less likely to manage earnings. It implies as the firms expose their true environmental status regarding water, they draw the attention of the public and will have less chance to manage earnings. At the same time, as the social and economic status of females gets higher, this study examines whether the role of female directors on board affects that relationship. According to the finding, as the proportion of female directors on boards grows, corporations that report water risk are less prone to engage in earnings management. Thus, this study confirms that female directors contribute to raising a transparent economic environment. Also, investors might have a more favorable perspective on the information supplied by firms with a high proportion of female directors because of the beneficial influence of gender personnel composition on increasing corporate transparency.