Insights from an Analysis of Audit Committee Governance Practices at U.S. Registered Investment Companies and Public Operating Companies

2019 ◽  
Author(s):  
J. Gregory Jenkins ◽  
Jonathan Pyzoha ◽  
Mark H. Taylor
Keyword(s):  
Audit Committee ◽  
Investment Companies ◽  
Governance Practices

scholarly journals Analysis of the compliance of Brazilian firms with good corporate governance practices

2019 ◽  
Vol 11 (2) ◽  
Author(s):  
Vicente Lima Crisóstomo ◽  
Aline Maria Coelho Girão
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Audit Committee ◽  
Cost Benefit ◽  
Additional Contribution ◽  
Publicly Traded Companies ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
Cost Benefit Ratio ◽  
The Difference

Purpose: Studies report that the adoption of good corporate governance practices tends to improve firm value. However, the results of such adoption seem to be conditioned by specific institutional and legal characteristics of each country. This study aims to analyze compliance with good corporate governance practices in the context of publicly traded companies in the Brazilian market. Methodology: The sample is made up of 1336 annual observations of 167 companies listed on the B3 (Brasil, Bolsa, Balcão) in the period 2010-2017. The practices recommended by the main corporate governance codes in Brazil were used as benchmark. Tests for the difference in means (t-test) and in proportions (z-test) were used to compare the observed situation in the group of firms and the recommendations in the Brazilian market. Results: Despite the adoption of many of the best practices recommended, there is still space for advancement in the Brazilian firm corporate governance. The results indicate noncompliance of the Brazilian firm with the recommendations regarding the audit committee and fiscal council, which may particularly weaken transparency and control of firm’s internal activities. In addition, adherence to distinguished market segments is associated to a greater trend to observe the suggestions emanating from the codes, which may be due to the perception of a favorable cost-benefit ratio of the adoption of corporate governance practices. Contributions of the Study: The work provides additional contribution by presenting a detailed analysis of the current scenario of the Brazilian firm corporate governance captured from the evaluation of the degree of adoption of each practice recommended individually.

scholarly journals Corporate Governance And Voluntary Disclosure In France

2013 ◽  
Vol 29 (2) ◽  
pp. 561 ◽  
Author(s):  
Carlos P. Barros ◽  
Sabri Boubaker ◽  
Amal Hamrouni
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Audit Quality ◽  
Annual Reports ◽  
Managerial Ownership ◽  
Board Meeting ◽  
External Audit ◽  
Listed Firms ◽  
Governance Practices

This paper investigates the effect of corporate governance practices on the extent of voluntary disclosure in France. Using a panel of 206 non-financial French listed firms during the period 20062009, we find evidence that voluntary disclosure in annual reports increases with managerial ownership, board and audit committee independence, board meeting frequency, and external audit quality. We also find that frequency of audit committee meetings and diligence of board and auditing are associated with decreased disclosure. Additional findings show that larger, more profitable, and less indebted firms have greater voluntary disclosure.

Do corporate governance practices restrain earnings management in banking industry? Lessons from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Deepa Mangala ◽  
Neha Singla ◽  
Neha Singla
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Audit Committee ◽  
Least Square ◽  
Loan Loss ◽  
Content Type ◽  
Governance Practices ◽  
Indian Banks

Purpose This study aims to investigate the role of corporate governance practices in restraining earnings management in Indian commercial banks. Design/methodology/approach Estimation of earnings management is based on discretionary loan loss provision and discretionary realised security gains and losses using Beatty et al. (2002) model. The effect of corporate governance on earnings management is examined by performing two-way least square dummy variable regression. Data for a period of five years (2016–2020) is collected from the Centre for Monitoring Indian Economy ProwessIQ database, Reserve Bank of India website, annual report of banks, National Stock Exchange and bank’s website. Findings Regression results exhibit that number of board committees, size and independence of audit committee and joint audit are significantly effective in curbing earnings management. Other board-related variables (size, independence, meetings and diligence) and audit committee variables (meetings and diligence) are not effective in restraining earnings management in Indian banks. Practical implications The findings may prove to be helpful to regulators, board of directors and investors. It shows the weak area of corporate governance in India that is lack of autonomy to independent directors, which needs regulators attention and it also suggests that the number of independent auditors should be adequate for audit purposes. The board of directors must ensure the formulation of an adequate number of committees, which perform their own super specialised functions. This study brings an alarm to investors not to rely on reported earnings alone as they may be manipulated. Originality/value This paper substantiates the scant literature on the role of corporate governance practices in restraining earnings management in banks of emerging markets and to the best of the authors’ knowledge impact of joint audits on earnings management is previously unexplored in Indian banks, which are examined in this study.

A theoretical and econometric evaluation of corporate governance and capital structure in JSE-listed companies

2019 ◽  
Vol 19 (5) ◽  
pp. 1063-1081 ◽  
Author(s):  
Navitha Singh Sewpersadh
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Audit Committee ◽  
Firm Growth ◽  
Listed Companies ◽  
Annual Reports ◽  
Ceo Duality ◽  
Content Type ◽  
Governance Practices ◽  
Director Ownership

PurposeA vital resource for attracting investments and boosting economic growth is compliance with corporate-governance practices. To achieve firm growth, businesses often rely on leverage as a source of finance, which has tax-saving benefits but could attract financial distress costs. In this context, this study aims to examine the relationship between corporate governance and the use of debt financing in Johannesburg Stock Exchange (JSE)-listed companies.Design/methodology/approachThis study used a six-year period to examine 713 annual reports in an unbalanced panel of 130 JSE-listed companies from 2011 to 2016. The empirical econometric methodology used was the two-step difference generalised method of moments estimation model, which is robust in controlling endogeneity and potential bi-directional causality between leverage and corporate governance.FindingsThis study illustrated that corporate governance practices and firm-specific variables such as profitability, firm size and firm age have a significant influence on the capital structure decisions of JSE-listed firms. This study found support for four out of the six hypotheses. CEO duality and director ownership are positively correlated with leverage, whereas audit committee independence and board size are negatively correlated with leverage. This study also found contraventions of board independence, audit committee independence and CEO duality. The technology sector was the least compliant, with only 40 per cent of their boards being independent. The consumer-services sector had the maximum presence of CEO duality (7 per cent). The industrial sector had the highest average director ownership (18 per cent). The heath-care sector had 28 per cent of their audit committees in contravention of the independence rule.Practical implicationsA useful analysis of the theoretical frameworks used by academic writers are provided. This study revealed the governance practices contravened by the relevant sectors, as well as the associations between corporate governance and leverage.Originality/valueThe study contributes to the literature on capital structure and corporate governance by an emerging economy such as South Africa (SA) which has not been explored. This study’s results have key implications for policy-makers, practitioners, investors and regulatory authorities. This study informs these constituencies about a set of governance attributes that are catalysts and/or inhibitors of leverage.

The impact of corporate governance mechanisms on earning management: Literature review and proposing framework

2012 ◽  
Vol 2 (1) ◽  
pp. 134
Author(s):  
Ebraheem Saleem Salem Alzoubi ◽  
Mohamad Hisyam Selamat
Keyword(s):  
Corporate Governance ◽  
Conceptual Framework ◽  
Financial Reporting ◽  
Audit Committee ◽  
Research Study ◽  
Senior Management ◽  
Earning Management ◽  
Starting Point ◽  
Governance Practices ◽  
The Impact

This research study seeks to come up with a conceptual framework that investigates the different mechanisms of corporate governance and its effects on earning management (EM). This is to help build a conceptual framework of governance practices and its mechanisms, which mainly consists of board of directors and audit committee. To build the conceptual framework, the background of governance practices and EM theory served as a good starting point. The current research study is based on the complete assessment of present literatures, the two mechanisms of governance practices and EM. This paper serves as a guide to senior management, who seeks to improve their company’s financial reporting quality (FRQ) through the execution of governance practices, in which the governance practices support their company’s FRQ efforts. Furthermore, the conceptual framework serves as a benchmark for practitioners to execute their governance practices more effectively and efficiently in their own respective firms. This paper seeks to close the gap on the existing literature, by giving guidance to the senior management of governance practices companies that aspires to discover the competency of EM. By developing a deeper understanding of the relationship between corporate governance practices and EM, senior management can thus focus their efforts on the practices that ensure the firms’ ability to establish a competitive FRQ.

scholarly journals The financial impacts of board mechanisms on performance: The case of listed Moroccan banks

2021 ◽  
Vol 3 (2) ◽  
pp. 93-113
Author(s):  
Issam El Idrissi ◽  
◽  
Youssef Alami ◽  
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Fixed Effects ◽  
Audit Committee ◽  
Negative Impact ◽  
Governance Mechanisms ◽  
Return On Equity ◽  
Corporate Governance Mechanisms ◽  
Governance Practices ◽  
The Impact

Abstract Purpose: The present study examines the impact of corporate governance mechanisms on listed Moroccan banks' financial performance. Research methodology: This study investigates the relationship between listed banks' governance mechanisms and financial performance in the CSE for six years between 2014-2019. This study employs three performance measures, return on assets, return on equity, and Tobin's Q, to determine bank performance. This research uses the GMM EGLS approach to analyze data. In the first phase of this empirical research, we did use OLS, Fixed Effects, and Radom Effects regressions to show their inefficiency. Results: Our results portray that most board mechanisms have a negative impact on financial performance. In comparison, the audit committee and nomination & remuneration committee have a positive effect on financial performance. Limitations: Many qualitative and quantitative factors could influence financial performance and not only the used variables in this paper. Contribution: This research shows that the dynamic connection between corporate governance and financial performance is robust in the Moroccan banking context. Also, our study has important implications for establishing good corporate governance practices in emerging economies.

scholarly journals The Impact of Board Diversity, CEO Characteristics, and Board Committees on Financial Performance in the Case of Romanian Companies

2021 ◽  
Vol 15 (1) ◽  
pp. 7
Author(s):  
Bogdan Aurelian Mihail ◽  
Dalina Dumitrescu ◽  
Carmen Daniela Micu ◽  
Adriana Lobda
Keyword(s):  
Financial Performance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Board Members ◽  
Board Diversity ◽  
Board Committees ◽  
Positive Effects ◽  
Governance Practices ◽  
The Impact ◽  
Ceo Characteristics

This paper examines the impact of board diversity, CEO characteristics, and board committees on the financial performance of the companies listed on the Bucharest Stock Exchange (BSE). In order to test the influence of these characteristics, detailed data on more than 70 firms are collected by hand, for the 2016–2020 period, and comprehensive regression models are estimated. The findings show that there are positive effects of board diversity especially with regard to the independent board members. In terms of the board committees, the audit committee is found to have a favourable influence. The regression coefficients imply that a 10% increase in the share of independent board members would be associated with a 0.93% increase in ROE. Based on these findings, it can be argued that improving the corporate governance practices of the companies listed on the BSE would increase the performance and the value of these firms.

Corporate Governance in the Canadian Resource and Energy Sectors

2015 ◽  
Author(s):  
Janis Sarra ◽  
Vivian King
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Oil And Gas ◽  
Energy Sector ◽  
Stock Exchanges ◽  
Corporate Boards ◽  
Board Diversity ◽  
Governance Practices ◽  
The Subject ◽  
Insight Into

This article reports the results of a qualitative empirical study of the corporate governance practices of 23 resource and energy sector firms in Canada. The authors examine public disclosure and other documents filed by subject firms in each ofthe oil and energy, oil and gas trust, precious metal and forestry sectors and compare the firms' governance practices against ten indicia of effective governance advocated by regulators and stock exchanges. The working hypothesis ofthe article is that due to the global scope of the subject sectors, the sample firms may be better developed than, or have unique qualities compared to, firms in other sectors. The authors conclude that the sample firms perform reasonably well against the ten indicia. However there are significant sectoral differences.The authors note nearly all subjects have adopted codes of corporate conduct and an overall commitment to comply with new, more rigorous audit committee standards. Weaknesses include a lack of board diversity as one indicator of board independence, lack of formalized continuing education and uneven evaluation processes for corporate boards. Although this study provides insight into Canadian resource and energy sector governance practices, the authors note the need to dedicate more resources to developing consistent and independent standards to use as benchmarks in evaluating corporate governance practices.

scholarly journals Impact of Corporate Governance Practices on Corporate Social Responsibility: Evidence from Listed Banks, Finance and Insurance Companies in Sri Lanka

2019 ◽  
Vol 14 (2) ◽  
pp. 115-138
Author(s):  
Lingesiya Kengatharan ◽  
◽  
Thangarasa Sivakaran ◽  
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Sri Lanka ◽  
Social Responsibility ◽  
Firm Size ◽  
Audit Committee ◽  
Insurance Companies ◽  
Return On Assets ◽  
Governance Practices ◽  
Corporate Social

The objective of this study is to examine the impact of corporate governance practices on corporate social responsibility of the listed banks, finance and insurance companies in Sri Lanka over the period of 2013 to 2017. A sample of 20 firms out of 72 banks, finance and insurance firms listed on the Colombo Stock Exchange was considered for this study. The study utilized secondary data which were collected from annual reports of the sampled firm. Corporate social responsibility was measured by a 40-item disclose index. Corporate governance practices were measured by board size, board independence, women on board and size of audit committee. Return on assets and firm size were considered as control variables. Results of the study revealed that independent directors, return on assets and firm size have significantly positively influenced corporate social responsibility. Board size, women on the board and size of audit committee have not shown any significant impact on corporate social responsibility. The result of this study is deemed to benefit external investors and shareholders who will be able to know that how the firm committed their Corporate Social Responsible activities rather than profit maximization. Further the finding is useful for interested people such as public, government, and other financial institutions. Moreover, it will help to future researchers for further investigation related to this topic. Keywords: corporate social responsibility, corporate governance practices, stakeholder theory

scholarly journals Corporate Governance Practices and Disclosure of Risk Management Sharia Bank in Asean

2021 ◽  
Vol 13 (1) ◽  
Author(s):  
Wiwik Utami ◽  
Lin Oktris ◽  
Rini Rini ◽  
Nur Wachidah Yulianti
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Audit Committee ◽  
Supervisory Board ◽  
Audit Committees ◽  
Governance Practices ◽  
Risk Committee ◽  
Management Disclosures ◽  
Conventional Banks

Abstract. The risks faced by Islamic banks are similar to conventional banks. Therefore, Sharia Banks must also carry out risk management disclosures. This study aims to examine the effect of governance, including the Sharia Supervisory Board, Independent Commissioner, Audit Committee, Risk Committee, the doubling of the Sharia Supervisory Board Position, and the frequency of meetings on the quality of risk management disclosures. The population is Sharia Banks in ASEAN; samples are selected purposively according to the data's completeness that can be accessed through the capital market website. Risk management disclosures are measured using the index of completeness of risk items revealed. Data analysis was performed using multiple regression analysis. The study found that the number of audit committees and meeting frequency had a significant and positive effect on the quality of risk management disclosures. The number of Sharia supervisory boards has a significant effect on the negative coefficient. Other governance variables do not affect risk management disclosures.Keywords: Sharia Bank, Corporate Governance, Risk Management, Disclosure.Abstrak. Risiko yang dihadapi bank syariah hampir sama dengan bank konvensional. Oleh karena itu, Bank Syariah juga wajib melakukan pengungkapan manajemen risiko. Penelitian ini bertujuan untuk menguji pengaruh tata kelola antara lain Dewan Pengawas Syariah, Komisaris Independen, Komite Audit, Komite Risiko, penggandaan Jabatan Dewan Pengawas Syariah, dan frekuensi rapat terhadap kualitas pengungkapan manajemen risiko. Populasinya adalah Bank Syariah di ASEAN. Sampel dipilih secara purposif sesuai dengan kelengkapan data yang dapat diakses melalui website pasar modal. Pengungkapan manajemen risiko diukur dengan menggunakan indeks kelengkapan item risiko yang diungkap. Analisis data dilakukan dengan menggunakan analisis regresi berganda. Hasil penelitian menyimpulkan bahwa jumlah komite audit dan frekuensi rapat berpengaruh signifikan dan positif terhadap kualitas pengungkapan manajemen risiko. Jumlah dewan pengawas syariah berpengaruh signifikan dengan koefisien negatif. Variabel tata kelola lainnya tidak mempengaruhi pengungkapan manajemen risiko.Kata Kunci: Bank Syariah, Tata Kelola Perusahaan, Manajemen Risiko, Pengungkapan.

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