Audit and risk committee in financial crime prevention

2019 ◽  
Vol 26 (1) ◽  
pp. 223-234 ◽  
Author(s):  
Wan Nailah Abdullah ◽  
Roshima Said
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Design Methodology ◽  
Financial Crime ◽  
Governance Mechanism ◽  
Web Based ◽  
Content Type ◽  
Corporate Governance Mechanism ◽  
Risk Committee ◽  
Practical Implications

Purpose This empirical study aims to examine two areas: first, the characteristics of the audit committee and their relationship with corporate financial crime so as to ensure that their effectiveness as a corporate governance mechanism is still relevant; and second, the effectiveness of having a risk committee which is separated from the audit committee in the prevention of corporate financial crime. Design/methodology/approach This empirical research was carried out by using a Web-based data collection for corporate financial crime cases. Findings While the results for audit committee characteristics are not supported, the findings, however, indicate a significant relationship between the existence of a stand-alone risk committee with corporate financial crime incidences. Practical implications The result of the study serves as an empirical indicator of a firm’s consideration in deciding on the implementation of a stand-alone risk committee from its audit committee. Originality/value Both the descriptive and correlation analyses produced by this paper provide new insights into the extent of corporate financial crime, as well as the empirical evidence of the effectiveness of having a stand-alone risk committee.

scholarly journals THE EFFECT OF INTERNAL GOVERNANCE ON CORPORATE FINANCIAL CRIME OF COMPANIES IN MALAYSIA

2020 ◽  
Vol 2 (2) ◽  
pp. 53-64
Author(s):  
Wan Nailah Abdullah ◽  
Roshima Said ◽  
Kiymet Caliyurt
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Financial Crime ◽  
Managerial Ownership ◽  
Governance Mechanism ◽  
Internal Governance ◽  
Web Based ◽  
Corporate Governance Mechanism ◽  
Risk Committee ◽  
Risk Management Committee

This empirical study proposes to examine one of the main areas in corporate governance i.e., the internal governance factors and their relationship with corporate financial crime and to find out whether their effectiveness as a corporate governance mechanism is still relevant in the prevention of corporate financial crime. The internal governance factors tested in the study are audit diligence, audit size, employee shares option scheme, managerial ownership and stand-alone risk management committee. The research was carried out by using a web-based data collection for corporate financial crime cases. The findings indicate a significant relationship between the existences of a stand-alone risk committee with corporate financial crime incidences. The result of the study serves as an empirical indicator for a firm’s consideration in deciding on the implementation of a stand-alone risk committee from its audit committee. Both the descriptive and correlation analyses produced by this paper provide new insights into the extent of corporate financial crime, as well as the empirical evidence of the effectiveness of having a stand-alone risk committee.

Does corporate governance affect the performance of Islamic banks? New insight into Islamic countries

2020 ◽  
Vol 20 (6) ◽  
pp. 1073-1090 ◽  
Author(s):  
Ejaz Aslam ◽  
Razali Haron
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Positive Impact ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Method Of Moment ◽  
Content Type ◽  
Return On Equity ◽  
Islamic Countries ◽  
And Performance

Purpose Corporate governance plays a significant role to overcome agency issues and develop the culture of transparency and openness. In this context, this paper aims to examine how corporate governance mechanisms affect the performance of Islamic banks (IBs). Design/methodology/approach Stepwise, two-step system generalize method of moment estimation technique is used in the analysis in which control variables are added into the model sequentially. This study used data on 129 IBs from 29 Islamic countries (Middle East, South Asia and Southeast Asia) during the period of 2008 to 2017. Findings The findings suggest that the audit committee (AUDC) and Shariah board (SB) have positive impact on the performance of IBs (return on assets and return on equity). However, board size and risk management committee have negative and significant effect on the performance of IBs. CEO duality and non-executive directors have mixed relationship with the performance of IBs. These results support the argument that IBs need to improve their financial performance through appropriate governance mechanism. Research limitations/implications The findings of the study added a new dimension to the governance research that could be a valuable source of knowledge for policymakers and regulators to improve the existing governance mechanism for better performance of IBs. Originality/value The study fills the gap in the literature by addressing the issue of corporate governance on performance of IBs across countries. Agency theory is discussed to explain the relationship between corporate governance mechanism and performance.

scholarly journals Stewardship theory: is board accountability necessary?

2017 ◽  
Vol 59 (6) ◽  
pp. 1292-1314 ◽  
Author(s):  
Andrew Keay
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Design Methodology ◽  
Agency Problems ◽  
Stewardship Theory ◽  
Content Type ◽  
General Terms ◽  
Practical Implications

Purpose The purpose of the paper is to demonstrate that notwithstanding the fact that stewardship theory embraces things like trust of directors, their professionalism, loyalty and willingness to be concerned for the interests of others, as well as rejecting the foundations of classic agency problems that are asserted by agency theory, board accountability is as relevant to stewardship theory as it is to agency theory. Design/methodology/approach The paper applies the theory underlying board accountability in corporate governance, which is so often applied both in the corporate governance literature and in practice with agency theory in mind, to stewardship theory. Findings While the idea of accountability of boards is generally associated with an explanation and conceptualisation of the role and behaviour of directors as agents within classic agency theory, the paper demonstrates that board accountability is a necessary part of board life even if the role of directors is explained and conceptualised in terms of stewardship theory. Practical implications The paper suggests some accountability mechanisms that might be employed in a stewardship approach. Originality/value While many authors have talked in general terms about board accountability and its importance, this is the first paper that has engaged in a substantial study that links board accountability directly with stewardship theory, and to establish that accountability is necessary.

The big bath of demonetization in India: strike on black money for corporate governance

2018 ◽  
Vol 21 (4) ◽  
pp. 594-600 ◽  
Author(s):  
Sandeep Goel
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Content Type ◽  
Positive Effects ◽  
Corporate World ◽  
The World ◽  
Future Improvement ◽  
Policy Measures ◽  
The Government ◽  
Practical Implications

Purpose This paper aims to focus on the concept of abolition of black money and the demonetization movement started in India for cleaning black money and its impact on corporate world and Indian economy. It discusses the corporate governance effect of the demonetization scheme and various policy measures taken by the government to unearth and curb the black money in the country. It also states the challenges in its process of implementation and implications for future. Design/methodology/approach It appraises and reviews the concept of demonetization and its process in India since its implementation on November 8, 2016. Findings The biggest positive effects of this move were eradication of stocked and staked up money, cleansing of the financial system and improving governance in India. But its implementation had mix outcomes with its own challenges for future improvement. Practical implications The lessons drawn from the experience are expected to pave way for the countries at large. Originality/value It is an original paper on demonetization in India, and it is hoped that the lessons learnt thereof will pave the way for the world at large.

Web-based tools for collaborative research

2017 ◽  
Vol 34 (8) ◽  
pp. 8-19
Author(s):  
Stacy Brody
Keyword(s):  
Collaborative Research ◽  
Design Methodology ◽  
Research Collaboration ◽  
Low Cost ◽  
Research Process ◽  
Web Based ◽  
Content Type ◽  
Collaborative Tools ◽  
Start Ups ◽  
Practical Implications

Purpose The purpose of this paper is to profile various types of Web-based tools to facilitate research collaboration within and across institutions. Design/methodology/approach Various Web-based tools were tested by the author. Additionally, tutorial videos and guides were reviewed. Findings There are various free and low-cost tools available to assist in the collaborative research process, and librarians are well-positioned to facilitate their usage. Practical implications Librarians and researchers will learn about various types of tools available at free or at low cost to fulfill needs of the collaborative research process. Social implications As the tools highlighted are either free or of low cost, they are also valuable to start-ups and can be recommended for entrepreneurs. Originality/value As the realm of Web-based collaborative tools continues to evolve, the options must be continually revisited and reviewed for currency.

How corporate governance structures affect strategic change decisions

2018 ◽  
Vol 34 (4) ◽  
pp. 4-6
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Reading Time ◽  
Strategic Change ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Governance Structures ◽  
Content Type ◽  
Pertinent Information ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Major acquisitions involve strategic decision-making of the highest order. Companies most inclined toward such acquisitions tend to exhibit particular corporate governance structures. The CEO is invariably highly influential and this influence is strengthened by board and committee compositions which impact on levels of internal monitoring. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Investor protection: effects of takeover convergence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jyoti Dixit ◽  
Poonam Singh ◽  
Arunima Haldar
Keyword(s):  
Corporate Governance ◽  
Common Law ◽  
Investor Protection ◽  
Critical Role ◽  
Emerging Economy ◽  
International Standards ◽  
Governance Mechanism ◽  
Content Type ◽  
Global Standards ◽  
Corporate Governance Mechanism

Purpose Takeovers play a critical role as an external corporate governance mechanism to ensure investor protection. There is a long-standing debate on whether the convergence of corporate governance to global standards can enable emerging economies to ensure investor protection. This paper aims to analyse the evolution of the takeover code, namely, Securities Exchange Board of India’s Substantial Acquisition of Shares and Takeovers (2011) in India from the lens of investor protection. It then compares the takeover provisions in India, the USA, the UK, Singapore and Australia to examine the extent of convergence and its implications for investor protection. Design/methodology/approach Using a cross-national comparative analysis of takeover mechanisms in common law countries, the study analyses the extent and relevance of convergence in form. The focus of the comparison is on regulations governing offer size, offer price, creeping acquisition and initial trigger limit for the mandatory open offer. Findings The findings suggest that certain provisions such as the initial trigger threshold for the mandatory offer and the offer prices of the Indian takeover code are converging with the standards in common law countries. However, the offer price determination based on market prices may not reflect true market value in an inefficient market like India. Other provisions such as creeping acquisition and offer size are not only diverging from the international standards but are also inconsistent with the key objective of investor protections of the Indian regulator. Research limitations/implications Indian takeover regulation needs to converge to higher global standards to ensure adherence to improved investor protection. This needs to be done for the initial trigger limit for mandatory bid and offer prices, after accounting for the differences in institutional structure. The Indian regulators need to revisit provisions on the initial trigger, creeping acquisition to converge to the broader principle of investor protection. Originality/value This technical paper provides a comprehensive depiction of takeover mechanisms in an emerging economy context as a means of investor protection. Further using a comparative lens, it analyses the relevance of convergence of takeover laws. Thus, advances the theoretical knowledge of limited extant work on external corporate governance mechanism in an emerging economy context.

The impact of corporate governance code on earnings management in listed non-financial firms

2017 ◽  
Vol 7 (4) ◽  
pp. 428-444 ◽  
Author(s):  
Erick Rading Outa ◽  
Paul Eisenberg ◽  
Peterson K. Ozili
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Design Methodology ◽  
Explanatory Variable ◽  
Content Type ◽  
Listed Firms ◽  
Financial Firms ◽  
New Institutions ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to examine whether voluntary corporate governance (CG) code issued in 2002 constrain earnings management (EM) among listed non-finance companies in Kenya. Design/methodology/approach Using a panel data of 338-firm year’s observations between 2005 and 2014, the authors test the hypothesis that CG constrains EM in non-finance firms listed in Kenya. The authors regress discretionary accruals (DA) against a developed Corporate Governance Index (CGI). Findings The overall results show that DA is not significantly related to CG suggesting the voluntary CG code does not deter EM in non-finance companies in Kenya. Practical implications Evidence of income decreasing\increasing accruals implies EM still exists among the listed firms. This suggests that policymakers may need to consider radical actions including alternative or new CG approaches and new institutions to improve the effectiveness of CG. Originality/value This study extends existing studies by including composite CG as possible explanatory variable for constraining EM. The authors contribute to the debate by demonstrating that the voluntary CG code in Kenya is not effective in constraining DA and therefore the current initiatives by the regulator to change the current CG code are appropriately directed.

Does corporate governance influence earnings management in listed companies in Bahrain Bourse?

2018 ◽  
Vol 12 (4) ◽  
pp. 551-570 ◽  
Author(s):  
Bahaaeddin Alareeni
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Design Methodology ◽  
Empirical Support ◽  
Asian Country ◽  
Listed Companies ◽  
Discretionary Accruals ◽  
Board Independence ◽  
Content Type ◽  
Practical Implications

PurposeThis paper aims to consider data for listed companies in Bahrain Bourse to determine whether companies practice earnings management (EM). Further, the effect of a set of corporate governance characteristics on EM practices is examined.Design/methodology/approachThe EM level was measured using discretionary accruals (DA) [calculated using the Modified Jones (1995) Model]. The study sample consisted of 20 companies listed during the period 2011-2015. Panel regression model was used to test the study hypotheses and achieve the study aims.FindingsEM is negatively correlated with board size, confirming that a larger board is associated with a lower level of EM practices. Further, board independence is positively correlated with EM, suggesting that the larger the number of independent directors, the higher the level of EM practices. In addition, internal ownership is positively related to EM, confirming that the higher level of internal ownership increases EM practices. CEO duality does not appear to have any effect on EM in Bahrain Bourse. More interestingly, the findings reveal that companies practice EM through income-increasing DA.Research limitations/implicationsFinancial data and data related to other corporate governance characteristics are lacking.Practical implicationsThe results of this study provide empirical support for the development of new regulations and amendments and necessary corrective decisions regarding the effectiveness of applying corporate governance code in Bahrain Bourse. More specifically, this study reveals an urgent need for new amendments to restrict EM practices in Bahrain Bourse.Originality/valueThis study enriches the EM literature by covering Bahrain as an Asian country, which has not been sufficiently examined in relation to this topic. Further, this study provides a clear picture of the level of EM practices in Bahrain Bourse to multiple parties.

scholarly journals Corporate governance in practice: the role of practitioners' understanding in implementing compliance programs

2020 ◽  
Vol 33 (4) ◽  
pp. 887-911
Author(s):  
Riccardo Stacchezzini ◽  
Francesca Rossignoli ◽  
Silvano Corbella
Keyword(s):  
Corporate Governance ◽  
Governance Mechanism ◽  
Content Type ◽  
Case Study Analysis ◽  
Implementation Processes ◽  
Compliance Programs ◽  
Corporate Governance Mechanisms ◽  
Potential Benefits ◽  
Corporate Governance Mechanism

PurposeThis article investigates the implementation of a compliance programme (CP) in terms of how practitioners conceive of and execute the responsibilities arising from this corporate governance mechanism.Design/methodology/approachThis study involves a practice lens approach forms the case study analysis and interpretation, involving both interviews and documentary materials collected from an Italian company with prolonged compliance experience. Schatzki's (2002, 2010) practice organisation framework guides the interpretation of CP as a practice organised by rules, practical and general understandings and teleoaffective structures.FindingsCP practice evolves over time. A practical understanding of daily actions required to accomplish the CP and a general understanding of the responsibilities connected with the CP, such as the attitudes with which the CP is performed, are mutually constitutive and jointly favour this evolution. Dedicated artefacts – such as IT platforms, training seminars and compliance performance indicators – help spread both of these types of understanding. These artefacts also align practitioners' general understanding with the CP's teleoaffective structures imposed, including the CP's assigned objectives and the desired reactions to them.Research limitations/implicationsThe findings have theoretical and practical implications by revealing the relevance of practitioners' understanding of corporate governance mechanisms in their implementation processes.Originality/valueThis study reveals the potential benefits of practice lens approaches in corporate governance studies. It responds to the call for qualitative studies that demonstrate corporate governance as implemented in daily activities.

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