Financial statements can show the company's operation, finance and cash flow status, so financial statements are an important basis for investors or other stakeholders to make decisions. Therefore, listed OTC companies must publish financial statements that have been audited by accountants. Listed OTC companies are usually larger in scale, with more stakeholders and wider influence. However, if the financial statements are manipulated or fraudulent, the rights and interests of investors or other stakeholders may be damaged. The sample is taken from the Taiwan Economic Journal (TEJ). The sampling period is from 2012 to 2021, earnings management is first measured by adjudicative accruals, and then linear regression is used to explore the correlation between financial statement fraud, corporate governance and earnings management in Taiwan-listed OTC companies. The empirical results show that the number of board meetings, the ratio of managers' shareholdings, and the ratio of directors' and supervisors' shareholdings are significantly positively correlated with earnings management; the size of the board of directors has a significant negative correlation with earnings management.
