scholarly journals Voluntary audit committee characteristics in financially distressed and healthy firms: a study of the efficacy of the ASX corporate governance council recommendations

2014 ◽  
Vol 12 (1) ◽  
pp. 308-321 ◽  
Author(s):  
Seema Miglani
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Audit Committee ◽  
Audit Committees ◽  
Executive Directors ◽  
Financial Expert ◽  
Financially Distressed ◽  
The Impact

The aim of this paper is to address the impact of certain audit committee characteristics identified by the ASX Corporate Governance Council on improving the effectiveness of corporate audit committees on the likelihood of financial distress. Using a sample of 155 listed Australian firms, this paper finds support for the argument that the adoption of some, but not all, recommendations concerning the formation of an audit committee is beneficial for firms, which in this paper is reflected in a reduced likelihood of financial distress. In particular, the presence of a financial expert and solely non-executive directors on audit committee are associated with lower financial distress likelihood. By contrast, chairperson duality is significantly positively related to the probability of financial distress

Impact of Corporate Governance on the Cash Holding of the Firms: An Empirical Study of Indian Manufacturing Sector

GIS Business ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 47-52
Author(s):  
Karam Pal Narwal ◽  
Sonia Jindal
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Manufacturing Sector ◽  
Control Variable ◽  
Cash Holding ◽  
Executive Directors ◽  
Control Effect ◽  
Board Size ◽  
Indian Manufacturing Sector ◽  
The Impact

The paper empirically examines the impact of corporate governance on the cash holding of the firms. The components of corporate governance are measured by board size, board meeting, audit committee members, directors remuneration and non executive directors and the cash holding is measured with the log of average cash and size is taken as control variable for the control effect on the dependent variables. Moreover, correlation and panel regression model were employed to examine the relationship between the corporate governance and cash holding. Empirical data was collected from 96 firms over the period of 2004-05 to 2013-14. The results show that directors remuneration and the number of audit committee members positively influence the cash holding and the board size also positively influences the cash holding whereas, the non executive directors and the board meetings do not play any role in enhancing the cash holding.

The Impact of Financial Distress, Corporate Governance, and Auditor Switching on Audit Delay

2021 ◽  
Vol 6 (2) ◽  
pp. 108-117
Author(s):  
Sylvi Angelia ◽  
Rizal Mawardi
Keyword(s):  
Corporate Governance ◽  
Financial Services ◽  
Financial Distress ◽  
Audit Committee ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Auditor Switching ◽  
Analysis Technique ◽  
The Impact

Objective – The purpose of this study is to examine the effect between financial distress, corporate governance, auditor switching and audit delay. This research sample using data on a manufacturing company on the Indonesia Stock Exchange. Methodology – The analysis technique used is multiple linear regression analysis technique. Findings– The research finding show that financial distress and the size of the audit committee have a significant effect on audit delay, while the concentration of ownership, managerial ownership, change of directors, and auditor switching has no significant effect on audit delay. Second finding explain that consideration for companies listed on the Indonesia Stock Exchange to pay attention to the timeliness of submitting financial reports and independent auditor reports so as not to get sanctions from the Financial Services Authority. Novelty – Our novelty research using the relationship of Financial Distress, Corporate Governance and Auditor Switching on new research model to Audit Delay. Type of Paper: Empirical JEL Classification: M41, M42 Keywords: Financial Distress, Corporate Governance, Auditor Switching, Audit Delay

scholarly journals Impact of Corporate Governance on Financial Performance: Karachi Stock Exchange, Pakistan

2016 ◽  
Vol 6 (2) ◽  
pp. 401 ◽  
Author(s):  
Aon Waqas Awan ◽  
Javed Ahmed Jamali
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Profit Margin ◽  
Audit Committees ◽  
Board Size ◽  
Good Decision ◽  
Return On Equity ◽  
The Impact

The aim of the research is to understand the impact of corporate governance on financial performance of listed companies on Karachi Stock Exchange Pakistan. Data was collected from forty two companies from different sectors like, insurance, banking, investment banking, and sugar industries. Study includes variables like profit margin & return on equity as a dependent (profitability) and board size, audit committee, annual general meetings & chief executive office (corporate governance). Using Pooled OLS, the result of the study proved those board size and audit committees have positive relationship with Profit margin and Return on Equity, if any independent variable changes it also stimulus the positively changing impact on Return on Equity (ROE) and Audit Committee (AC). This research offers imminent guidelines to the policy and decision makers in any type of firms to take good decision to set their firms hierarchy system.

Corporate Governance Factors and Auditor Going Concern Assessments

2005 ◽  
Vol 4 (3) ◽  
pp. 5-29 ◽  
Author(s):  
Susan Parker ◽  
Gary F. Peters ◽  
Howard F. Turetsky
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Financial Distress ◽  
Audit Committee ◽  
Future Research ◽  
Going Concern ◽  
Sarbanes Oxley ◽  
Auditing Standards ◽  
Distressed Firms ◽  
The Impact

When making going concern assessments, Statement on Auditing Standards No. 59 (Auditing Standards Board 1988) directs auditors to consider the nature of management's plans and ability to mitigate periods of financial distress successfully. Corporate governance factors reflect attributes of control, oversight, and/or support of management's plans and actions intended to overcome financial distress. Correspondingly, this study investigates the impact of certain corporate governance factors on the likelihood of a going concern modification. Using survival analysis techniques, we examine a sample of 161 financially distressed firms for the time period 1988–1996. We find that auditors are twice as likely to issue a going concern modification when the CEO is replaced. We also find that going concern modifications are inversely associated with blockholder ownership. We also confirm Carcello and Neal's (2000) findings with respect to the association between an independent audit committee and an increased likelihood of modification. In a repeated events setting, we find that insider ownership and board independence are inversely associated with repeated going concern modifications. Our study concludes by proposing implications for the current financial reporting environment (including the Sarbanes‐Oxley Act of 2002) and future research avenues.

scholarly journals Corporate Governance and Financial Performance of Money Deposit Banks in Nigeria

2021 ◽  
Vol 7 (1) ◽  
pp. 75-98
Author(s):  
Bilqis Bolanle Amole ◽  
Ik Muo ◽  
Kamaldeen A. Lawal
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Negative Impact ◽  
Secondary Data ◽  
Least Square ◽  
Executive Directors ◽  
Study Results ◽  
The Impact

Purpose. The main cause of distress in the majority of Nigerian banks is poor corporate governance in the country. Corporate governance (CG) is a contemporary subject attracting the consideration of the corporate world, practitioners, consultants, academia and society at large. As a result, this study explores the financial performance (FP) of money deposit banks (MDBs) in Nigeria as a result of corporate governance put in. It went on to investigate the impact of board size and composition, as well as the audit committee, on bank financial performance. Methodology. A descriptive design method was adopted, while secondary data in the form of yearly financial reports of banks selected for the study were obtained and relevant documents via electronic search of databases. Descriptive statistics were used in analyzing the data and an econometric model of panel least square (PLS) regression test was employed for the study. Findings and Implication. The findings affirmed that the correlation between size of board of directors and bank performance was significant, however negative. The results of the study show that the board of directors (BOD) composition significantly influences the FP of MDBs. The study results further reveal that the correlation between size of the audit committee (AC) and FP of MDBs is significant and also a negative one. As a result, based on the empirical findings of the study, it is concluded that CG has a statistically significant influence on the FP of Nigeria’s listed money deposit banks. Mechanisms such as the large size and composition of the board as well as the size of the audit committee encourage a negative impact on the FP. In line with the foregoing, the study recommended that an effort be made to improve CG, in the sense that the number of directors on board should be kept to a desirable level, and that the ratio of executive directors to non-executive directors, as well as the size of the audit committee, is kept at an optimal level.

scholarly journals The role of an audit committee in bank solvency: An emerging market case

2019 ◽  
Vol 8 (1) ◽  
pp. 38-46 ◽  
Author(s):  
Hussein Salia ◽  
Emmanuel Budu Addo ◽  
Nicholas Adoboe-Mensah
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Banking Sector ◽  
Emerging Market ◽  
Audit Committees ◽  
Regulatory Body ◽  
Effective Functioning ◽  
Governance Systems ◽  
The Impact

Recent discourse on corporate failures gives prominence to the impact of weak corporate governance systems in most corporate entities, hence reasons for investors and creditors pessimism. This literature review article seeks to articulate how audit committee could strengthen corporate governance in organizations. The paper reviews the guidelines developed by the Bank of Ghana to curb the degeneration of the Banking sector in Ghana following the collapse of seven indigenous banks between 2017 and 2018. The objective of this paper is to underscore the effective functioning of audit committees as a panacea to the corporate governance weaknesses in Ghana. The paper observes that albeit the Bank of Ghana, as a regulatory body, underscored weak corporate governance systems – it failed to emphasize mechanisms for strengthening audit committees in its guidelines to regulate the sector. The paper, therefore, promotes the presence and effective functioning of the audit committees as an additional layer to strengthen the monitoring and supervisory functions within corporate bodies. It recommends that the Bank of Ghana must emphasize the establishment of audit committees as a core part of corporate governance systems of all banks to ensure that the interest of all stakeholders is protected adequately through the oversight role of the audit committees.

scholarly journals The impact of corporate governance elements on environmental reporting : the case of public listed companies in Malaysia

2014 ◽  
Vol 11 (1) ◽  
pp. 75
Author(s):  
Mohd Rashdan Sallehuddin
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Listed Companies ◽  
Annual Reports ◽  
Executive Directors ◽  
Government Ownership ◽  
Environmental Reporting ◽  
Female Director ◽  
The Impact ◽  
The Relationship

The paper aims to examine the impact of the relationship between the elements of corporate governance and environmental reporting of public listed companies in Malaysia. This study adopts a cross sectional analysis by examining the 2010 annual reports of 254 public listed companies and using content analysis as the method to measure the extent of environmental reporting and compared with various corporate governance measures. Regression analysis was used to examine the relationship between Corporate Environmental Reporting (CER) and independent variables of Corporate Governance (CG) namely independent non-executive directors, audit committee composition, female director, duality, managerial and government ownership. Analysis found a significant relationship between the extents of environmental reporting with government ownership. In contrast, the extent of CER is insignificant with relation of independent non-executive directors, audit committee composition, female director, duality and managerial ownership. The results could be useful to provide evidence to regulatory bodies to look further and to identify the elements of corporate governance that will enhance the CER.

scholarly journals Pengaruh Corporate Governance Terhadap Financial disstres

Owner ◽  
2021 ◽  
Vol 5 (2) ◽  
pp. 307-318
Author(s):  
Ayu Aditia Hariyani ◽  
Andi Kartika
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Audit Committee ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Audit Committees ◽  
Managerial Ownership ◽  
Company Size ◽  
Manufacturing Companies ◽  
Control Variables

This study aims to examine and find empirical evidence regarding the influence of corporate governance as explained by managerial ownership, institutional ownership, independent commissioners, audit committee on financial distress in manufacturing companies listed on the IDX for the 2017-2019 period. In this study, leverage, profitability and company size are used as control variables. The population in this study are all manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2017-2019. The sample was selected using purposive sampling method and the results get a sample of 361 companies. The analytical tool used in this study is logistic regression. The test results show that managerial ownership has no effect on financial distress. Meanwhile, institutional ownership, independent commissioners, and audit committees have an effect on financial distress. Leverage and company size as control variables show results that are not in accordance with their function, namely that they do not affect financial distress, and profitability as control variables show results that are in accordance with their function and have an effect on financial distress

scholarly journals Corporate Governance Structures and Probability of Financial Distress: Evidence From Indonesia Manufacturing Companies

2020 ◽  
Vol 12 (1) ◽  
pp. 174
Author(s):  
Maria Goreti Kentris Indarti ◽  
Jacobus Widiatmoko ◽  
Imang Dapit Pamungkas
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Audit Committee ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Negative Influence ◽  
Audit Committees ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
A Company

This study aims to examine the effect of four variables, which include independent commissioners, audit committees, institutional ownership and managerial ownership as a proxy for the corporate governance mechanisms on financial distress. This was carried out on the manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2018. The samples were selected using the purposive sampling method and 224 data were obtained. The hypothesis in this study was tested using logistic regression. The results showed that independent commissioners have a negative influence on financial distress, while the audit committee, institutional ownership and managerial ownership have no effect. This implies that an independent commissioner functions as an effective supervisory mechanism to prevent a company from experiencing financial distress. Furthermore, two control variables used in this study, namely leverage and profitability, were able to produce results as predicted. It was discovered that a higher leverage level leads to a greater possibility of experiencing financial distress and conversely, the higher the profitability of a company, the lower the probability of experiencing financial distress.

Audit Committee and Tax Planning Of Listed Firms: Evidence from Nigeria

2020 ◽  
Vol 11 (1) ◽  
pp. 115-115
Author(s):  
B. Tijjani ◽  
Z. Peter
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Tax Planning ◽  
Audit Committees ◽  
Annual Reports ◽  
Executive Directors ◽  
Listed Firms ◽  
Financial Firms ◽  
Financial Expertise ◽  
Negative Effect

This study investigates the effect of audit committee on tax planning of listed non-financial firms in Nigeria. It aims at finding out the audit committee structure that improves tax planning thereby reducing tax liability of the firms. Data for the study were extracted from annual reports and accounts of the sampled non-financial companies for a period of ten years (2008 – 2017). The data collected were analysed using descriptive statistics to provide summary statistics for the variables, and correlation analysis was carried out using Pearson product-moment correlation to determine the relationship between the dependent and independent variables. Regression analysis was also conducted. The study reveals that the audit committee's compositions, frequency of meetings, and financial expertise have a negative effect on tax planning of listed non-financial firms in Nigeria. In addition, profitability shows a positive and significant effect on tax planning, and leverage has a negative effect. Theoretically, the study is significant for its contribution to agency and stakeholder theories as they explain relationship between corporate governance and tax planning. The findings have implications for the various stakeholders of listed non-financial firms in Nigeria. They should be assured of tax planning for companies who have a good number of non-executive directors in audit committees, frequent meetings which are attended by members, and financial experts. Keywords: Tax planning, audit committee, corporate governance, tax expenses, non-executive directors.

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