Exploring the Role of Ethical Leadership in Mitigating Earnings Management

ABSTRACT This paper investigates the relationship between ethical leadership and earnings management in corporations, offering insights to enhance corporate governance and financial reporting integrity. By conducting semi‐structured interviews with leaders and managers from 21 firms across 16 countries, this study examines how ethical leadership affects earnings management across various industries. The results indicate a significant negative correlation between ethical leadership and earnings management practices, emphasizing the role of ethical leaders in fostering financial transparency. This research contributes to the literature by providing empirical evidence of how organizations can leverage ethical leadership to mitigate earnings manipulation and promote financial integrity.