The objective of this research is to address three research questions. First, whether firms with higher level of financial risk are more likely to engage in earnings management (EM). Second, whether firms with female directorship are less likely to engage in EM. Third, whether female directorship can moderates the possible association between financial risk and EM. I use sample consist of listed companies in Taiwan Stock Exchange (TSE) and Over-the-Counter (OTC) over a sample period covering 2013 to 2016. The empirical results show that firms with higher financial risk tend to manage their earnings upwards, supporting my first hypothesis. Further, I find firms with female director sitting on the board tend to manage their earnings downwards; however, it is not significant. Finally, I do find a significant moderating impact of female directors on the financial – EM relation. That is, when facing higher financial risk, firms with female directors tend to be more conservative and more likely to avoid earnings upwards than firms without any female directors.

The objective of this research is to address three research questions. First, whether firms with higher level of financial risk are more likely to engage in earnings management (EM). Second, whether firms with female directorship are less likely to engage in EM. Third, whether female directorship can moderates the possible association between financial risk and EM. I use sample consist of listed companies in Taiwan Stock Exchange (TSE) and Over-the-Counter (OTC) over a sample period covering 2013 to 2016. The empirical results show that firms with higher financial risk tend to manage their earnings upwards, supporting my first hypothesis. Further, I find firms with female director sitting on the board tend to manage their earnings downwards; however, it is not significant. Finally, I do find a significant moderating impact of female directors on the financial – EM relation. That is, when facing higher financial risk, firms with female directors tend to be more conservative and more likely to avoid earnings upwards than firms without any female directors.

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