Corporate governance, ethics, internal controls and compliance with IFRS

PurposeThe purpose of this paper is to establish the relationship between corporate governance, ethical culture, Internal Controls over Financial Reporting (ICFR) and compliance with International Financial Reporting Standards (IFRS) by microfinance institutions (MFIs).Design/methodology/approachThis is a cross-sectional survey based on a sample of 85 MFIs in Uganda. Hypotheses were tested using partial least squares (PLS) analysis technique. An unweighed IFRS compliance index to capture the level of compliance with IFRS was constructed. Yet to capture corporate governance, ethical culture and ICFR variables, the perceptions of top management of MFIs have been taken into consideration.FindingsCorporate governance, ethical culture and ICFR, each makes a significant contribution to compliance with IFRS. Also both corporate governance and ethical culture are significantly associated with ICFR. However, compliance with IFRS by MFIs is better enhanced by corporate governance and ethical culture through ICFR.Research limitations/implicationsResults support the idea that in terms of agency and virtue ethics theories, the board should support ICFR to minimize egocentric managers and other employees and also inculcate an ethical culture to achieve better compliance with IFRS because corporate governance and ethical culture are associated with sound ICFR which in turn lead to compliance with IFRS.Practical/implicationsBoards of MFIs should encourage investments that improve ICFR. At the same time, regulators should ensure that boards are composed of members with financial expertise, with no conflict of interest and introduce mechanisms that encourage boards to perform their roles.Originality/valueThe study contributes towards a methodological position by showing that the behavioural perspective of corporate governance can be an alternative to the boards’ structural variables in investigating compliance with IFRS. A direct association of ethical culture and compliance with IFRS and an indirect association through ICFR can be envisaged.

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Corporate governance and internal controls over financial reporting in Ugandan MFIs

Journal of Accounting in Emerging Economies ◽

10.1108/jaee-02-2016-0018 ◽

2017 ◽

Vol 7 (3) ◽

pp. 294-317 ◽

Cited By ~ 10

Author(s):

Irene Nalukenge ◽

Ven Tauringana ◽

Joseph Mpeera Ntayi

Keyword(s):

Corporate Governance ◽

Financial Reporting ◽

Self Regulation ◽

Ordinary Least Squares ◽

Internal Controls ◽

Microfinance Institutions ◽

Role Performance ◽

Cross Sectional ◽

Content Type ◽

The Relationship

Purpose The purpose of this paper is to investigate the relationship between corporate governance and internal controls over financial reporting (ICFR) of microfinance institutions (MFIs) in Uganda. Design/methodology/approach This study was cross-sectional and correlational. In all, 70 Ugandan MFIs were surveyed and the data were analyzed using SPSS Version 20 to test the nine hypotheses which were put forward. The hypothesized relationships were tested using the ordinary least squares regression. Findings The findings based on multiple regression analysis suggest that board role performance, expertise and Association of Microfinance Institutions in Uganda (AMFIU) membership are significant predictors of the ICFR. However, board independence and separation of CEO and chairman roles are not significant predictors. The results also show that the firm-specific control variables (auditor type, size, accounting qualification and age) are also not significant. Research limitations/implications This study has limitations in that it is cross-sectional, thus limiting monitoring changes in behavior over time and also because the effectiveness of the ICFR was assessed using perceptions. Practical implications Efforts by regulators and other stakeholders to improve the ICFR must focus on the corporate governance aspects such as board expertise and ensure that the board performs its roles. Originality/value The paper adds to the existing literature on the corporate governance and ICFR by documenting the relationship between the corporate governance and ICFR. The study complements the previous studies on the ICFR by demonstrating that board expertise and board role performance improve the ICFR. Such evidence does not currently exist. The findings also indicate that an MFI which is a member of AMFIU was found to have better ICFR supporting self-regulation.

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Determinants of adoption of International Financial Reporting Standards in Ugandan micro finance institutions

African Journal of Economic and Management Studies ◽

10.1108/ajems-08-2018-0236 ◽

2019 ◽

Vol 10 (3) ◽

pp. 336-355 ◽

Cited By ~ 3

Author(s):

Juma Bananuka ◽

Zainabu Tumwebaze ◽

Doreen Musimenta ◽

Patience Nuwagaba

Keyword(s):

Financial Reporting ◽

African Country ◽

Explanatory Power ◽

International Financial Reporting Standards ◽

Reporting Standards ◽

Microfinance Institutions ◽

Cross Sectional ◽

Content Type ◽

Financial Reporting Standards ◽

Correlational Data

Purpose The purpose of this paper is to report on the results of a study carried out to establish the contribution of board of directors’ effectiveness, intellectual capital (IC) and managerial attitude to the adoption of International Financial Reporting Standards (IFRSs) in microfinance institutions (MFIs). Design/methodology/approach This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 67 MFIs that are members of the Association of Microfinance Institutions of Uganda. The data were analyzed using statistical package for social sciences. Findings Both board of director’s effectiveness and IC positively and significantly contribute to the adoption of IFRSs. Managerial attitude is positively and significantly associated with the adoption of IFRSs, but its explanatory power is subsumed in IC. Originality/value To the authors’ knowledge, this is the first study to investigate the contribution of board of director’s effectiveness, IC and managerial attitude to the adoption of IFRSs in MFIs using evidence from a developing African country like Uganda.

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Factors Affecting the Sustainability of Microfinance Institutions: A Case of Malawi Microfinance Institutions

10.21203/rs.3.rs-373410/v1 ◽

2021 ◽

Author(s):

Helex Kayembe ◽

Yunjian Lin ◽

George N. Chidimbah Munthali ◽

Wu Xuelian ◽

Lazarus Obed Livingstone Banda ◽

...

Keyword(s):

Corporate Governance ◽

Portfolio Management ◽

Developing Economies ◽

Statistical Significance ◽

Least Square ◽

Microfinance Institutions ◽

Cross Sectional Survey ◽

Loan Portfolio ◽

Cross Sectional ◽

Factors Affecting

Abstract Background: Micro Finance Institutions (MFIs) have been used as a tool for poverty alleviation in many developing economies globally, including Malawi. However, their sustainability in many countries has been dependent solely on loan repayment, donor aid, and subsidies. Aim: This study aimed at investigating the factors that influence the sustainability of MFIs in Malawi. Methods: A cross-sectional survey was conducted from November to December 2020 among the MFIs employees in the central region of Malawi. Convenience and purposive sampling techniques were used to collect data online using a google form sent via social media platforms. Data were analyzed using IBM SPSS software with Statistical significance placed at .05. Results: 120 respondents completed the survey representing a 79.3% response rate, of which 63% were male. The majority of the respondents fell within the age group of 31-40 years, representing 58%, having attained universities and vocational colleges' education level, representing 32.8%. With an experience of above 16 years, representing 41.2% of which were branch managers, representing 49.6%. The results of the ordinary least square regression indicated that reporting and loan management system (RLMS) (β=0.200, P=0.021), corporate-governance (β=0.257, P=0.004), and commercialization (β=0.161, P=0.047) were positively significantly influencing the sustainability of MFI. On the other hand, loan design/type (β =-0.211, P=0.006), loan portfolio management (β =-0.179, P=0.050) were found to be negatively impacting the MFI. Lastly, variables of over-indebtedness (B= 0.077, P=0.426), loan disbursement (β =0.121, P=0.104) were found statistically insignificant. Conclusion: Our study argues that commercialization, standardized reporting, and effective loan portfolio management systems, stakeholder-based approach to corporate governance, and favored board independence through scale and cost management is critical to improving MFIs' financial sustainability.

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The Effect of International Financial Reporting Standards Adoption on Foreign Direct Investment and the Economy

Advances in Finance, Accounting, and Economics - Economics and Political Implications of International Financial Reporting Standards ◽

10.4018/978-1-4666-9876-5.ch017 ◽

2016 ◽

pp. 342-361 ◽

Cited By ~ 2

Author(s):

Christopher Boachie

Keyword(s):

Foreign Direct Investment ◽

Financial Reporting ◽

Direct Investment ◽

Survey Study ◽

International Financial Reporting Standards ◽

Primary Data ◽

Reporting Standards ◽

Cross Sectional Survey ◽

Cross Sectional ◽

Financial Reporting Standards

This chapter examines the effect of International Financial Reporting Standards (IFRS) adoption on Foreign Direct Investment (FDI) and Ghanaian economy. It is a cross sectional survey study, with the population consisting of both Preparers and Users of financial statements. Stratified Random sampling method was adopted to gather primary data. Findings showed that IFRS has been adopted in Ghana and it is perceived that IFRS implementation promotes FDI inflows and economic growth. This study recommends all stakeholders to have full implementation to reap benefits of the IFRS and principle - based standards. The implication is that preparers need to work on their skills and expertise gap through training and development and to ensure that these standards are included in the academic and professional curricula. Moreover, regulatory bodies should monitor and enforce these standards but where local content is needed, convergence should be the solution.

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Can forensic accounting impact sustainable corporate governance?

Corporate Governance ◽

10.1108/cg-06-2020-0269 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Ali Rehman ◽

Fathyah Hashim

Keyword(s):

Corporate Governance ◽

Structural Equation ◽

Survey Design ◽

Equation Modeling ◽

Governance System ◽

Cross Sectional Survey ◽

Design Data ◽

Cross Sectional ◽

Content Type ◽

Organizational Policies

Purpose The purpose of this paper is the measurement of forensic accounting’s (FA) impact on sustainable corporate governance (SCG) within Omani public listed companies. Beyond merely cataloging the latest criminal innovations and SCG problems, this paper offers a path forward to overcome the myriad threats that can harm the organization and society. FA and SCG can achieve, anticipate and prevent tomorrow’s fraud today before organizations reach the point of no return. Design/methodology/approach For this study, FA is an independent variable and SCG is the dependent variable. This study used a descriptive cross-sectional survey design. Data are collected by internet-based tool and analyzed via partial least squares structural equation modeling and Statistical Package for Social Sciences. Findings Result suggests that FA has a significant direct impact over SCG; moreover, FA can become the part of governance management toward the elimination of fraud and achievement of SCG. Practical implications This study can assist regulators, professional bodies and organizations in amending their codes of corporate governance and organizational policies by introducing the SCG clauses and making FA as a compulsory part of governance system. Originality/value Up to the best of the knowledge of researchers, there is no study conducted before which verifies the FA impact on SCG; moreover, previous relevant studies verify only one constituent for SCG, whereas this study is identifying three constituents necessary for SCG.

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The extent of compliance with FRS 101 standard: Malaysian evidence

Journal of Applied Accounting Research ◽

10.1108/jaar-10-2013-0078 ◽

2017 ◽

Vol 18 (1) ◽

pp. 87-115 ◽

Cited By ~ 7

Author(s):

Azhar Abdul Rahman ◽

Mohd Diah Hamdan

Keyword(s):

Corporate Governance ◽

Financial Reporting ◽

Audit Committee ◽

Content Type ◽

Corporate Compliance ◽

Financial Reporting Standards ◽

Compliance Level ◽

Using Data ◽

Analysis Models ◽

The Impact

Purpose The purpose of this paper is to investigate Malaysian companies’ compliance with mandatory accounting standards. Specifically, this study examines the efficacy of agency-related mechanisms on the degree of compliance with Financial Reporting Standards (FRS) 101, Presentation of Financial Statements. It so proceeds by focussing on corporate governance parameters (board characteristics and ownership structure) and other firm characteristics. Design/methodology/approach Using data drawn from a sample of 105 Malaysian companies listed on the ACE market in 2009, the authors employ multiple regression analysis models to establish whether selected corporate governance and company-specific characteristics (proxying for agency-related mechanisms) are related to the degree of disclosure compliance. Findings The results indicate that the overall disclosure compliance is high (92.5 per cent). Furthermore, only firm size is positively associated with the degree of compliance. The other variables, those consisting of board independence, audit committee independence, CEO duality, the extent of outside blockholders’ ownership and leverage, do not show any significant relationship with the degree of compliance. Research limitations/implications This study focusses on only one accounting standard (FRS 101) that is mandatory in Malaysia. FRS 101 is both structured and rigid, leaving no room for companies to conceal any particular information. The sample of Malaysian companies selected is restricted to those listed only on the ACE market. As such, the results cannot be generalised to every company in Malaysia. Practical implications These results have important implications for policy makers because they suggest that whilst agency-related mechanisms may motivate compliance with mandatory standards, full compliance may be unattainable without regulations. Originality/value This is the only study in Malaysia to investigate the impact of regulatory requirements on corporate compliance level by companies listed on the new ACE market, which was introduced by the Bursa Malaysia in August 2009. This study contributes to the literature by examining the effects of both company-specific characteristics (such as company size, company age, liquidity, etc.) and corporate governance parameters on the degree of corporate compliance with mandatory disclosure, simultaneously, in contrast with prior studies which have examined them in isolation.

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Audit committee effectiveness, isomorphic forces, managerial attitude and adoption of international financial reporting standards

Journal of Accounting in Emerging Economies ◽

10.1108/jaee-08-2018-0084 ◽

2019 ◽

Vol 9 (4) ◽

pp. 502-526 ◽

Cited By ~ 7

Author(s):

Juma Bananuka ◽

Arafat Walugyo Kadaali ◽

Veronica Mukyala ◽

Bruno Muramuzi ◽

Zainab Namusobya

Keyword(s):

Financial Reporting ◽

Audit Committee ◽

Explanatory Power ◽

Mediating Effect ◽

International Financial Reporting Standards ◽

Reporting Standards ◽

Microfinance Institutions ◽

Content Type ◽

Financial Reporting Standards ◽

The Relationship

Purpose The purpose of this paper is to report the results of a study carried out to establish the contribution of audit committee (AC) effectiveness, isomorphic forces and managerial attitude to the adoption of international financial reporting standards (IFRS). Design/methodology/approach This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 67 MFIs that are members of the Association of Microfinance Institutions of Uganda (AMFIU). Findings Both AC effectiveness, isomorphic forces and managerial attitude significantly contribute to the adoption of IFRS. However, the explanatory power of managerial attitude is subsumed in isomorphic forces and AC effectiveness. Results further indicate that AC effectiveness partially mediates the relationship between isomorphic forces and adoption of IFRS. In terms of control variables, ownership and capital structure are not significant predictors of adoption of IFRS. Originality/value To the authors’ knowledge, this is the first study to investigate the contribution of AC effectiveness, isomorphic forces and managerial attitude to the adoption of IFRS in MFIs using evidence from a developing country on the African scene like Uganda. Further, earlier literature has not tested the mediating effect of AC effectiveness in the relationship between isomorphic forces and the adoption of IFRS which has been reported in this paper.

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The Effect of International Financial Reporting Standards Adoption on Foreign Direct Investment and the Economy

Foreign Direct Investments ◽

10.4018/978-1-7998-2448-0.ch032 ◽

2020 ◽

pp. 748-768

Author(s):

Christopher Boachie

Keyword(s):

Foreign Direct Investment ◽

Financial Reporting ◽

Direct Investment ◽

Survey Study ◽

International Financial Reporting Standards ◽

Primary Data ◽

Reporting Standards ◽

Cross Sectional Survey ◽

Cross Sectional ◽

Financial Reporting Standards

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Relevance of fair value of Brazilian banks securities in the financial crisis

International Journal of Emerging Markets ◽

10.1108/ijoem-11-2012-0150 ◽

2015 ◽

Vol 10 (4) ◽

pp. 684-696 ◽

Cited By ~ 1

Author(s):

Fernando Chiqueto ◽

Ricardo Luiz Menezes Silva ◽

Guilherme Colossal ◽

L. Nelson G. Carvalho

Keyword(s):

Financial Crisis ◽

Financial Reporting ◽

Explanatory Power ◽

Fair Value ◽

Cross Sectional ◽

Content Type ◽

Financial Reporting Standards ◽

Sfas 157 ◽

Ifrs 7 ◽

Gains And Losses

Purpose – The purpose of this paper is to seek to clarify whether the fair value (FV) of Brazilian banks securities is relevant for investors in times of crisis. Design/methodology/approach – The information gathered for 14 quarters, 2007-2010, of a cross-sectional sample of banks was used for the purpose of explaining the value of shares based on amortized cost and the FV of securities, the book value of equity and the financial crisis. The return on shares was regressed based on the realized and unrealized gains and losses on securities, adjusted income and the crisis. Findings – The results indicated that the FV is relevant. The results also corroborated the hypothesis that, during the crisis, there was a decrease in the relevance of the FV of securities since the accounting practices adopted in Brazil did not specify how to estimate FV, as required by SFAS 157, neither did they require disclosure of the FV hierarchy, as established International Financial Reporting Standards (IFRS) 7. It was concluded that FV has incremental explanatory power over equity, but not over amortized cost. Furthermore it possible to conclude that quarterly unrealized gains and losses on securities are not relevant, which could be explained by possible tax planning practices, since, in Brazil, the mark-to-market adjustment of securities is only deductible, or taxable, when settled. However, the realized and unrealized gains and losses are value-relevant during the period of financial crisis. Originality/value – This study provides empirical evidence about the relevance of FV during the financial crisis in Brazil.

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Is corporate governance maturity measurable?

Corporate Governance ◽

10.1108/cg-07-2019-0220 ◽

2020 ◽

Vol 20 (4) ◽

pp. 601-619

Author(s):

Ali Rehman ◽

Fathyah Hashim

Keyword(s):

Corporate Governance ◽

Empirical Research ◽

Design Methodology ◽

Survey Design ◽

The Internet ◽

Cross Sectional Survey ◽

Design Data ◽

Cross Sectional ◽

Content Type ◽

Practical Implications

Purpose This study aims to intend toward the measurement of corporate governance to identify its maturity levels within Omani public listed companies and also propose to identify whether corporate governance maturity (CGM) levels vary significantly between sectors or not. CGM is an innovation in the field of corporate governance, which assists organizations in achieving their objectives and satisfying shareholders. Design/methodology/approach This study used descriptive cross-sectional survey design. Data are collected by the internet-based tool and analyzed via SPSS. Findings This study found that corporate governance is measurable and can be measured to the levels of maturity. Moreover, this study identified that CGM does not differ among different sectors. From a total of 107 organizations, none of the organizations falls under the forming level and mature level. However, majority of organizations falls under normalized level followed by developing and established levels of maturity. Practical implications This study integrates significant empirical research and literature to broaden the potentials of CGM. This study provides a framework along with a calculation tool, which can be used by organizations, regulators and policymakers. Originality/value To the best of the authors’ knowledge, the maturity levels of Omani organizations are never being measured before. Moreover, past studies demonstrate single constituent relationship with CGM and not all four. Therefore, this study is distinctive from others by testing all four major components or constituents toward CGM.

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