CEO power, audit committee effectiveness and earnings quality Dorcus Kalembe Department of Accounting, Makerere University Business School, Kampala, Uganda Twaha Kigongo Kaawaase Department of Accounting, Makerere University Business School, Kampala, Uganda and Department of Audit and Assurance, Sejjaaka, Kaawaase and Co., Kampala, Uganda Stephen Korutaro Nkundabanyanga Department of Accounting, Makerere University Business School, Kampala, Uganda, and Isaac Newton Kayongo Department of Finance, Makerere University Business School, Kampala, Uganda Abstract Purpose – The purpose of this study is to establish the relationship between chief executive officer (CEO) power, audit committee effectiveness and earnings quality in regulated firms in Uganda. Design/methodology/approach – The authors employed cross-sectional and correlational research designs, based on a sample of 136 regulated firms in Uganda. Data were collected using a questionnaire survey from Chief Finance Officers and Chief Audit Executives. Data were analyzed using a Statistical Package for Social Sciences and Partial Least Squares Structural Equation Modeling. Findings – Results indicate that CEO power causes negative variances in earnings quality. The results also reveal that audit committee effectiveness positively relates relatively similarly with earnings quality. In addition, CEO power and audit committee effectiveness are negative and significantly related. The results further indicate that CEO power and earnings quality are mediated by audit committee effectiveness. Research limitations/implications – CEO power creates an opaque accounting environment which may leave the stakeholders unable to evaluate the true economic reality of the firm. Audit committee effectiveness is an important enabler for reporting high-quality earnings even in the presence of a powerful CEO. Originality/value – This study contributes toward a methodological stance of using perceptions to understand earnings quality in regulated firms in Uganda. This is probably the first study that has specifically explored earnings quality using only the fundamental qualitative characteristics of accounting information (as proxies) as enshrined in the Conceptual Framework for Financial Reporting 2018 particularly in Uganda since Her adoption of International Financial Reporting Standards in 1998. Second, the indirect effect of audit committee effectiveness and CEO power is tested. Keywords CEO power, Audit committee effectiveness, Earnings quality, Regulated firms, Uganda Paper type Research paper 1. Introduction Researchers continue to pay close attention to earnings quality (Benkraiem et al., 2021; Dichev et al., 2013). The basis for this focus is the belief that earnings quality enables businesses to generate capital (Francis et al., 2004), enables nations to draw in foreign investors with strong capital (Aggarwal et al., 2005) and guarantees effective resource allocation (Demerjian et al., 2013; Johl et al., 2013). Contemporaneously, the International Accounting Standard Board (IASB) emphasizes that one of the main goals of financial reporting is to provide information that is helpful to a variety of users in making economic decisions. However, new studies (e.g. Benkraiem et al., 2021) highlight the relative neglect of the primary qualitative attributes Earnings quality in regulated firms in Uganda The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/2042-1168.htm Received 28 September 2022 Revised 27 March 2023 14 June 2023 Accepted 14 June 2023 Journal of Accounting in Emerging Economies © Emerald Publishing Limited 2042-1168 DOI 10.1108/JAEE-09-2022-0277