The Impact of Characteristics of Board of Directors on Accounting Earnings Quality ：A Comparative Study of the Listed Firms between Korea and China

2018 ◽  
Vol 23 (3) ◽  
pp. 171-193
Author(s):  
Young Na ◽  
Chun－Mei Quan ◽  
Sung－Whan Park
Keyword(s):  
Comparative Study ◽  
Board Of Directors ◽  
Earnings Quality ◽  
Accounting Earnings ◽  
Listed Firms ◽  
The Impact

scholarly journals Agency Costs, Corporate Governance and the Nature of Controlling Shareholders: Evidence From French Listed Firms

2018 ◽  
Vol 8 (3) ◽  
pp. 256 ◽  
Author(s):  
Dabboussi Moez
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Agency Costs ◽  
Managerial Ownership ◽  
Investment Horizon ◽  
Agency Conflicts ◽  
Controlling Shareholders ◽  
Listed Firms ◽  
Indirect Benefits ◽  
The Impact

This paper examines the impact of internal corporate governance on agency costs for French firms from 2000 to 2015. Our results reveal that shareholders themselves are not a homogenous group since they have no single common investment horizon. We found that managerial ownership is more effective in mitigating operational expenses. However, they take advantage of excessive spending on indirect benefits. We show that board of directors does not serve as a significant deterrent to excessive discretionary expenses. Finally, we found that dividend policy is a useful tool to reduce agency conflicts by reducing cash that is available for discretionary uses.

The impact of corporate governance and ownership structure reforms on earnings quality in China

2015 ◽  
Vol 23 (2) ◽  
pp. 169-198 ◽  
Author(s):  
Xu_Dong Ji ◽  
Kamran Ahmed ◽  
Wei Lu
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Earnings Quality ◽  
Future Research ◽  
Governance Mechanisms ◽  
Content Type ◽  
Listed Firms ◽  
Ownership Structures ◽  
Corporate Governance Mechanisms ◽  
The Impact

Purpose – The purpose of this paper is to investigate the effect of corporate governance and ownership structures on earnings quality in China both prior and subsequent to two important corporate reforms: the code of corporate governance (CCG) in 2002 and the split share structure reform (SSR) in 2005. Design/methodology/approach – This study utilises informativeness of earnings (earnings response coefficient), conditional accounting conservatism and managerial discretionary accruals to assess earnings quality using 12,267 firm-year observations over 11 years from 2000 to 2010. Further, two dummy variables for measuring the changes of CCG and SSR are employed to estimate the effects of CCG and SSR reforms on earnings quality via OLS regression. Findings – This study finds that the promulgation of the CCG in 2002 has had a positive impact, but the SSR reform in 2005 has had little effect on listed firms’ earnings quality in China. These results hold good after controlling for a number of ownership, governance and other variables and estimating models with multiple measures of earnings’ quality. Research limitations/implications – Future research could focus on how western style corporate governance mechanisms have been constrained by the old management systems and governmental dominated ownership structures in Chinese listed firms. The conclusion is that simply coping Western corporate governance model is not suitable for every country. Practical implications – The results will assist Chinese regulators in improving reporting quality, ownership structure and governance mechanisms in China. The results will help international investors better understand quality of financial information in China. Originality/value – This is the first to our knowledge that addresses the effects of major governance and ownership reforms together on accounting earnings quality and, thus, makes a significant contribution on understanding the effect of regulatory reforms on improving earnings quality. In doing so, it also indirectly assesses the effectiveness of western-style corporate governance mechanisms introduced in China.

scholarly journals Exploring the Impact of Ownership Structure on Earnings Predictability: Insights from Japan

2016 ◽  
Vol 9 (2) ◽  
pp. 97-121
Author(s):  
Mohammed Mehadi Masud Mazumder
Keyword(s):  
Ownership Structure ◽  
Earnings Quality ◽  
Insider Ownership ◽  
Listed Firms ◽  
Reporting Practices ◽  
Corporate Reporting ◽  
Earnings Predictability ◽  
Institutional Shareholders ◽  
The Impact ◽  
The Relationship

Using a very recent data over the period from 2007 to 2012 (sample period 2001–2012), this study estimates the relationship between ownership structure and earnings predictability in Japanese listed companies. In particular, this study investigates how three important categories of ownership (i.e., domestic institutional, foreign and insider ownership) are associated with earnings predictability in Japanese listed firms. The results show that higher domestic institutional (financial) ownership is associated with greater earnings predictability. The findings support the argument that institutional shareholders especially financial institutions ensure effective monitoring over corporate reporting practices which lead to better earnings quality. In sharp contrast, this study finds that incremental foreign institutional ownership in Japanese listed firms is associated with lower earnings predictability. Such finding is contrary to the oversimplifying assumption that increasing cross-border shareholdings is always associated with better earnings quality. This study demonstrates interesting insights regarding the impact of ownership structure on earnings predictability which surely carry significance for Japanese corporate policymakers and future researchers.

How Would the Mandatory Adoption of IFRS Affect the Earnings Quality of U.S. Firms? Evidence from Cross-Listed Firms in the U.S.

2011 ◽  
Vol 25 (4) ◽  
pp. 837-860 ◽  
Author(s):  
Jerry Sun ◽  
Steven F. Cahan ◽  
David Emanuel
Keyword(s):  
Earnings Quality ◽  
Discretionary Accruals ◽  
Earnings Persistence ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
The Cross ◽  
The Impact ◽  
Timely Loss Recognition ◽  
The U.S

SYNOPSIS We examine the impact of IFRS adoption on the earnings quality of foreign firms cross-listed in the U.S. from countries that have already adopted IFRS on a mandatory basis. We use the cross-listed firms as surrogates for the U.S. firms so we can observe the effect of IFRS adoption in the U.S. We examine five measures of earnings quality related to discretionary accruals, target beating, earnings persistence, timely loss recognition, and the earnings response coefficient (ERC). To isolate the effect of IFRS adoption, we use a matched sample design where each cross-listed firm is matched to a U.S. firm. We find the difference in earnings quality from the pre- to post-IFRS period is not different for the cross-listed and matched firms when earnings quality is measured by absolute discretionary accruals, timely loss recognition, or a long-window ERC. However, for the incidence of small positive earnings and earnings persistence, we find significant difference-in-differences, indicating that IFRS adoption led to an improvement in earnings quality for cross-listed firms relative to the matched firms. Our results are slightly surprising since U.S. GAAP is generally viewed as high-quality standards with little room for improvement.

scholarly journals The effect of executive compensation on earnings quality of conglomerates listed in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. 6-18
Author(s):  
Abubakar Yayangida ◽  
◽  
Agbi Samuel ◽  
Joshua Okpanachi ◽  
Victor Atabo ◽  
...  
Keyword(s):  
Earnings Management ◽  
Executive Compensation ◽  
Key Words ◽  
Earnings Quality ◽  
Annual Reports ◽  
Listed Firms ◽  
Executive Incentives ◽  
Multiple Regression Technique ◽  
The Impact

This paper is an empirical analysis of the impact of Executive compensation on earnings quality of listed firms in Nigeria for the period of 2015-2019. The study adopts the multiple regression technique. Data were collected from the annual reports and accounts of sampled firms. The findings reveal that Executive compensation positively and significantly affect the earnings quality of listed Conglomerates in Nigeria, the result implies that firms that pay higher emoluments to its executive are likely to improve the quality of earnings. It is recommended that the listed Conglomerates firms should increase the amount paid as emoluments to their executives as the higher emolument paid and received by executives improve the level of earnings quality and reduces earnings management which may be detrimental to the goal and objectives of the firm. Key words: Compensation, Conglomerates, Executive, Incentives, Performance, Shareholders

Do non-staggered board elections matter to earnings quality and the value relevance of earnings and book value?

2017 ◽  
Vol 16 (1) ◽  
pp. 46-66 ◽  
Author(s):  
Shuling Chiang ◽  
Gary Kleinman ◽  
Picheng Lee
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Stock Prices ◽  
Positive Relationship ◽  
Value Relevance ◽  
Earnings Quality ◽  
Discretionary Accruals ◽  
Content Type ◽  
Book Value ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of non-staggered voting for members of the board of directors on earnings quality and the value relevance of earnings and book value. Design/methodology/approach The authors used a sample of Taiwanese firms whose board was elected as a whole every three years from 2003 to 2013. The authors used multiple regression analysis to test whether board of directors elections and corporate governance affected earnings quality and the value relevance of earnings and book value. Findings The authors found that elections led to lower earnings quality, but better corporate governance led to greater earnings quality. In the presence of board elections, earnings have reduced value relevance but book value had increased value relevance. Finally, given board elections, the relative value relevance of earnings and book value on stock price was not fully moderated by strong corporate governance. Research limitations/implications The results presented here indicate the importance of better corporate governance in diffusing suspicions of management occasioned by the use of discretionary accruals in years in which board elections take place. Better corporate governance regimes led to a more positive relationship of discretionary accruals to earnings persistence, even in the presence of directorial elections. Similarly, better corporate governance regimes led to a more positive relationship between earnings per share and stock prices. Limitations include the restriction of the testing locale to Taiwan. That said, many companies around the globe use non-staggered board elections. Accordingly, these results suggest issues of importance to corporate governance advocates beyond Taiwan as well. Originality/value This study deepens the field’s understanding of the impact of corporate governance arrangements and schedules for electing board of directors’ members on issues of interest to stockholders.

scholarly journals The impact of corporate social responsibility on earnings quality in UK listed firms

2020 ◽  
Vol 9 (3) ◽  
pp. 678-695
Author(s):  
Zuhur Alatawi
Keyword(s):  
Regression Model ◽  
Financial Reporting ◽  
Regression Models ◽  
Earnings Quality ◽  
Listed Firms ◽  
Independent Variables ◽  
Size Growth ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

A business committed to CSR activities can establish a favourable reputation in the market hence this reputation can be used to mislead the market by making them rely on the financial reporting of the organisation. This study aimed to investigate the relationship between CSR and earnings quality for firms listed on FTSE 350. Besides, it aimed to explore the impact of CSR on the motivation of the management to improve the earnings quality or manage earnings. The research has applied LSDV regression and OLS regression on the data collected from 217 firms listed on the FTSE 350. The respective regression models applied by keeping earnings quality as a dependent variable and range of independent variables such as CSR, SIZE, GROWTH, LEVERAGE and ROA. Besides, the correlation coefficient has also been calculated despite, the result could not reveal the nature of the relationship between the variables hence regression model was applied. The results have revealed no relationship between earnings quality and CSR in the case of LSDV regression model. The same has been observed for the OLS model however, there exists a relatively significant relationship between earnings quality and LEVERAGE. Similar findings recorded for earnings quality and GROWTH.

scholarly journals The impact of corporate governance on market capitalization: evidence from Bahrain bourse

2016 ◽  
Vol 13 (3) ◽  
pp. 121-130 ◽  
Author(s):  
Muneer Mohamed Saeed Al Mubarak ◽  
Allam Mohammed Mousa Hamdan
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Fixed Effects ◽  
Future Research ◽  
Market Capitalization ◽  
Listed Firms ◽  
Econometric Methods ◽  
The Impact ◽  
The Relationship

Our study is based on the “Agency Theory”, as it interprets the relationship between corporate governance and market capitalization of firms listed in Bahrain Bourse (BB). Longitudinal data is used in this study from 36 listed firms in Bahrain Bourse during the period of 2009-2013. A set of econometric methods, including the fixed effects method, is used to overcome different measurement problems of such relationship. The study findings include a set of results that are related to effect of ownership structure and board of directors’ characteristics on market capitalization of firms. Based on these findings, a set of recommendations, along with study limitations and future research, are put forward.

ERP Systems and Earnings Quality: The Impact of Dominant Shareholdings in China

2016 ◽  
Vol 13 (2) ◽  
pp. 49-69
Author(s):  
Songsheng Chen ◽  
Ling Harris ◽  
Jiao Lai ◽  
Wenying Li
Keyword(s):  
Financial Reporting ◽  
Earnings Quality ◽  
Discretionary Accruals ◽  
Erp Systems ◽  
Absolute Value ◽  
Listed Firms ◽  
Enterprise Resources Planning ◽  
Post Test ◽  
The Absolute ◽  
The Impact

ABSTRACT Using a sample of ERP adopters among Chinese publicly listed firms and a one-group pre- and post-test design, this study examines the impact of dominant shareholdings on the relationship between Enterprise Resources Planning (ERP) systems and earnings quality. We use the absolute value of discretionary accruals as a proxy for earnings quality. We predict and find that as the dominant shareholdings increase, Chinese firms show a decrease in the absolute value of total discretionary accruals after ERP implementations. Furthermore, we find that after ERP implementations, discretionary short-term accruals decrease with higher dominant shareholdings, while discretionary long-term accruals increase with higher dominant shareholdings. Our study contributes to research and practice by documenting that dominant shareholdings in China can influence the impact of ERP implementations on earnings quality, suggesting that dominant shareholdings may induce dominant shareholders' self-serving incentives to influence firms' financial reporting via ERP implementations.

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