... directors B Xie et al / Journal of Corporate Finance (2003) 295–316 307 Finally, we show that the log of book value to total assets, the log of sales, and the log of the market value of equity ... 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 ... extent of earnings management Finally, our results show that more active boards, as proxied by the number of board meetings, and more active audit committees, as proxied by the number of committee...