*4.2. Regression Results*

Table 4 reports the results of the multivariate regression analysis on the panel data. The R-square is the coefficient of determination, and the value of 0.204 indicates that 20.4 percent of the variation in discretionary accruals is explained by the regression equation.

If we exclude the corporate governance variables (see Table A6 in the Appendix A), the results vary little to nothing compared to the results in Table 4. The difference between the two models is seen in the quality of the model, where Table 4 shows an r-squared of 0.204 compared to 0.148 in Table A6. This implies that model (3), as shown in Table 4 with the corporate governance variables, has a substantially bigger r-squared, and thus explains more of the variation in the absolute discretionary accruals.
