Several studies have analyzed the i

Several studies have analyzed the impact that certain governance characteristics may have on the accounting practices. These practices cover a wide range of elements such as earning management and smoothing, restatement and fraudulent financial reports. The general idea that inspires these studies is that the weaknesses of the corporate governance system provide an incentive for accounting frauds. These weaknesses may refer to the composition of the board of directors, to the effectiveness of the monitoring action exercised by the audit committee as well as other matters like incentive-based executives compensation or the controls made by the external auditors.