... Earnings management and corporate governance: the role of the board and the audit committee Biao Xie a, Wallace N. Davidson IIIa,*, Peter J. DaDaltbaDepartment of Finance, ... active and financially oriented board and audit committee may influence the level of earnings management, but the level of earnings management may influence the subsequent selection of board and audit ... Corporate Finance 9 (2003) 295–316306Finally, we show that the log of book value to total assets, the log of sales, and the log of the market value of equity are significantly and negatively correlated...