Antecedents to the Audit Quality of Non-Financial Firms Listed in Iraq Stock Exchange: The Moderating Role of Accounting Fairness

2021 ◽  
Vol 39 (11) ◽  
Author(s):  
Asaad Mohammed Ali Wahhab ◽  
Abbas Murad Khnaitel Alzubadi Alzubadi ◽  
Ali Shakir Mahmood Haddad
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Earning Management ◽  
Going Concern ◽  
Financial Firms ◽  
Audit Fee

The main objective of the current study is to examine audit fee, financial reporting quality, going concern, and earning management as antecedents to the audit quality of non-financial firms listed in Iraq stock Exchange. In addition to that the study has also examined the moderating role of accounting fairness in the relationship between audit fee, financial reporting quality, going concern, earning management and audit quality of non-financial firms listed in Iraq stock Exchange. The data of 60 firms listed on Iraqi stock exchange over the period of 4 years from 2017-2021 is taken from the audited accounts. The study basically employs panel data analytical tools in achieving the set goals of the research. The choice of panel data approach is informed by a number of methodological advantages it offers. Results indicates that that as interest in the agency theory grows, the importance of fairness as a principle will grow, and that it is expected that the value of this concept would grow as a means of resolving conflict and exploiting interests that arise between the many stakeholders in the firm. on the concept of fairness, agreeing that the interests of particular parties should not trump fairness, which he referred to as clarity. The results of the study have provided support to the hypothesis of the study. The findings of the study will be helpful for policymakers, and researchers on the issues related to accounting fairness ,audit fee, financial reporting quality, going concern, earning management and audit quality of non-financial firms listed in Iraq stock Exchange.

The Impact of Going Concern on Financial Reporting Quality: Evidence from Vietnam

2018 ◽  
Vol 34 (3) ◽  
Author(s):  
Phung Anh Thu ◽  
Nguyen Vinh Khuong
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Distress ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Viet Nam ◽  
Listed Firms ◽  
Going Concern ◽  
Debt Covenant

The investigation was conducted to contribute empirical evidence of the association between going concern and financial reporting quality of listed firms on the Vietnam stock market. Based on data from 279 companies listed on the HNX and HOSE exchanges in Vietnam for the period 2009-2015, the quantitative research. Results found that the relationship between the going concern and financial reporting quality of listed firms. Research results are significant for investors, regulators to the transparency of financial reporting information. Keywords Going concern, financial reporting quality, listed firms References Agrawal, K., & Chatterjee, C. (2015). Earnings management and financial distress: Evidence from India. Global Business Review, 16(5_suppl), 140S-154S.Bergstresser, D., & Philippon, T. (2006). CEO incentives and earnings management. Journal of Financial Economics, 80(3), 511–529.Burgstahler, D., & Dichev, I. (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24(1), 99–126.Charitou, A., Lambertides, N., & Trigeorgis, L. (2007a). Earnings behaviour of financially distressed firms: The role of institutional ownership. Abacus, 43(3), 271–296.Chen, Y., Chen, C., & Huang, S. (2010). An appraisal of financially distressed companies’ earnings management: Evidence from listed companies in China. Pacific Accounting Review, 22(1), 22–41Dechow, P., & Dichev, I. (2002). The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors. The Accounting Review, 77, 35-59.DeFond, M., & Jiambalvo, J. (1994). Debt covenant violation and manipulation of accruals. Journal of Accounting and Economics, 17(1), 145–176.DeFond, M.L., & Park, C.W. (1997). Smoothing income in anticipation of future earnings. Journal of Accounting and Economics, 23(2), 115–139.Dichev, I., & Skinner, D. (2004). Large sample evidence on the debt covenant hypothesis. Journal of Accounting Research, 40(4), 1091–1123.Đinh Thị Thu T., Nguyễn Vĩnh K. (2016). Tác động của hành vi điều chỉnh thu nhập đến khả năng hoạt động liên tục trong kế toán: Nghiên cứu thực nghiệm cho các doanh nghiệp niêm yết tại Việt Nam, Tạp chí phát triển khoa học và công nghệ, Quí 3, tr.96-108.Đỗ Thị Vân Trang (2015). Các mô hình đánh giá chất lượng báo cáo tài chính, Tạp chí chứng khoán Việt Nam, 200, tr 18-21.Habib, A., Uddin Bhuiyan, B., & Islam, A. (2013). Financial distress, earnings management and market pricing of accruals during the global financial crisis. Managerial Finance, 39(2), 155-180.Jaggi, B., & Lee, P. (2002). Earnings management response to debt covenant violations and debt restructuring. Journal of Accounting, Auditing & Finance, 17(4), 295–324.Kasznik, R., (1999). On the association between voluntary disclosure and earnings management. Journal of accounting research, 37(1), pp.57-81.Lu, J. (1999). An empirical study of earnings management by loss-making listed Chinese companies. KuaijiYanjiu (Accounting Research), (9), 25–35.McNichols, M.F. and Stubben, S.R., (2008). Does earnings management affect firms’ investment decisions?. The accounting review, 83(6), pp.1571-1603.Selahudin, N.F., Zakaria, N.B., & Sanusi, Z.M. (2014). Remodelling the earnings management with the appear- ance of leverage, financial distress and free cash flow: Malaysia and Thailand evidences. Journal of Applied Sciences, 14(21), 2644–2661.Skinner, D.J., & Sloan, R. (2002). Earnings surprises, growth expectations, and stock returns or don’t let an earnings torpedo sink your portfolio. Review of Accounting Studies, 7(2/3), 289–312.Sweeney, A.P., (1994). Debt-covenant violations and managers' accounting responses. Journal of Accounting & Economics, 17(3): 281-308.Trần Thị Thùy Linh, Mai Hoàng Hạnh (2015). Chất lượng báo cáo tài chính và kỳ hạn nợ ảnh hưởng đến hiệu quả hoạt động của doanh nghiệp Việt Nam, Tạp chí phát triển kinh tế, 10, tr.27-50.Trương Thị Thùy Dương (2017). Nâng cao chất lượng báo cáo tài chính công ty đại chúng, Tạp chí tài chính, 1(3), tr.55-56.Uwuigbe, Ranti, Bernard, (2015). Assessment of the effects of firm’s characteristics on earnings management of listed firms in Nigeria, Asian Economic and Financial Review,5(2):218-228.

Family ownership and financial reporting quality: Iranian evidence

2018 ◽  
Vol 8 (3) ◽  
pp. 339-356 ◽  
Author(s):  
Mahmoud Mousavi Shiri ◽  
Mahdi Salehi ◽  
Fatemeh Abbasi ◽  
Shayan Farhangdoust
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Stock Exchange ◽  
Accounting Information ◽  
Reporting Quality ◽  
Audit Fees ◽  
Financial Reporting Quality ◽  
Family Ownership ◽  
Content Type

PurposeIn the process of reporting accounting information, the auditor’s objective is to detect possible misstatements and errors in accounting information. Audit evidence aids auditors in providing reasonable assurance about the quality of financial reporting. Studying the quality of family firms’ financial reporting is of higher importance relative to non-family firms due to lower risk of accounting manipulation. Therefore, the purpose of this paper is to examine the relationship between family ownership structure and financial reporting quality from an auditing perspective.Design/methodology/approachTo analyze the research hypotheses, the authors use a sample data consisted of 221 companies listed on the Tehran Stock Exchange (including 52 family and 169 non-family firms) over a five-year span from 2011 to 2015.FindingsUsing multivariate regression analysis of panel data, our results indicate that audit risk in family firms is lower than their counterparts. Likewise, the findings are indicative of lower audit fees paid by family firms as compared to non-family ones. The authors also find that auditors put more effort in family firms and thus audit effort is more significant for these kinds of firms.Originality/valueThe study focuses on family ownership and financial reporting quality in a developing country like Iran and the results of the study may be beneficial to other developing nations, as Iran stock market possesses some unique features which are not normally prevailing in other equity markets, even in the Middle East.

Audit committee impact on the quality of financial reporting and disclosure

2016 ◽  
Vol 39 (12) ◽  
pp. 1639-1662 ◽  
Author(s):  
Mahdi Salehi ◽  
Mohammadamin Shirazi
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Fiscal Year ◽  
Corporate Disclosure ◽  
Content Type

Purpose The purpose of this study is to shed further light on the characteristics of an audit committee (AC) and its probable relationship with the quality of financial reporting and disclosure. Based on the findings of extant research that there are different factors that may have implications for the AC’ effectiveness, the authors posit an association between the aforementioned financial aspects and AC presence. Design/methodology/approach The authors test their hypotheses by performing panel data analysis on a sample of 100 companies listed on the Tehran Stock Exchange (TSE) during 2013-2014. The tests were conducted by using Eviews software. Findings Examining previously tested characteristics of an AC, the authors indicate that the number of AC meetings held during fiscal year is negatively associated with the quality of corporate disclosure, whereas AC expertise and size are positively associated with the quality firm’s financial disclosure. Their findings are also indicative of a non-significant relationship between other AC attributes and financial reporting quality (FRQ) except for AC independence, which is positively associated with FRQ. Finally, they provide some evidence that the size of a firm positively affects the quality of its financial reporting and disclosure. Research limitations/implications Although the study has been thoroughly considered and cautiously planned, some limitations have yet arisen. Initially, this research was conducted in an Iranian setting where the formation of ACs is on the verge of regulation; therefore, the data utilized for the study only contains the two-year period of ACs’ statutory activity. In addition, a lack of consensus on the precise measures of an AC’s effectiveness could be considered as a restrictive factor. Originality/value The authors’ study contributes to the AC literature by providing empirical evidence of an association between ACs’ different attributes and financial aspects in a newly regulated environment like the TSE. The results provided in this paper could be fruitful for auditors, regulators, institutional investors and policymakers.

scholarly journals Pengaruh Kualitas Pelaporan Keuangan Berbasis Akuntansi dan Berbasis Pasar terhadap Kesenjangan Informasi pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia

2018 ◽  
Vol 2 (02) ◽  
pp. 124-131
Author(s):  
Suci Wahyuliza
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Sampling Technique ◽  
Income Smoothing ◽  
Financial Reporting Quality ◽  
Test Results ◽  
Manufacturing Companies ◽  
Purposive Sampling

This research aims to test the influence of the quality of financial reporting accounting based and market based on the asimetri of information. The sample used the manufacturing companies listed on the Indonesia stock exchange from 2007 untill 2011. Using a Purposive sampling technique of Sampling and retrieved samples of as many as 41 companies.Hypothesis test results showed that the quality of financial reporting  based accounting is represented with three indicator are persistence and predictability has no effect on the asimetri of information whereas the effect on income smoothing indicator asimetri of information. Further market based financial reporting quality is represented by three indicators, namely the relevance of the value and timeliness of the Asimetri information has no effect while the indicator of conservatism has influence on the asimetri of information.

The ISIS Impacts on the Political Connections, Board Interlock, and Quality of Financial Reporting

2021 ◽  
pp. 234779892110324
Author(s):  
Mahdi Salehi ◽  
Ali Zuhair Maalah ◽  
Hamideh Nazaridavaji
Keyword(s):  
Multiple Regression ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Political Connections ◽  
Islamic State ◽  
The Relationship

This research examines the relationship between political connections, board interlock, and the quality of financial reporting of the listed companies on the Iraq Stock Exchange (ISE) with ISIS's mediating role (the Islamic State of Iraq and Syria). This research is about the mediating part of ISIS in the relationship between board interlock, political connections, and financial reporting quality. The study attempts to reveal whether or not political connections and board interlock can improve financial reporting quality. A multiple regression model is used to test the research hypothesis. The samples consist of 245 (firm-year) companies listed on the ISE from 2012 to 2018, and the hypothesis is tested by multiple regression based on integrated data models. The results demonstrate a significant and negative relationship between political connections, board interlock, and financial reporting quality. Thus, higher political connections reduce the quality of financial reporting. The results also conveyed that ISIS contributes to the decline of this relationship. This research expands the literature review on ISIS’s impact on these engaged countries' economies.

scholarly journals IFRS compliance, corporate governance and financial reporting quality of GSE-listed non-financial firms

2020 ◽  
Vol 7 (1) ◽  
pp. 1759856
Author(s):  
Deborah Esi Gyanba Mbir ◽  
Otuo Serebour Agyemang ◽  
George Tackie ◽  
Mac Junior Abeka
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Financial Firms

scholarly journals Corporate Governance and Financial Reporting Quality in Selected Nigerian Company

2014 ◽  
Vol 2 (3) ◽  
pp. 7-16
Author(s):  
Onuorah Anastasia Chi-Chi (PhD) ◽  
Imene Oghenefegha Friday
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Discretionary Accruals ◽  
Financial Reporting Quality ◽  
Board Structure ◽  
Quality Audit

This paper evaluated the level of performance of some selected companies ranging from commodities, brewery, banking, oil and gas and beverages in terms of corporate governance measure indictors on the firm quality of financial reporting in Nigeria. The data were collected from 2006 to 2015. Econometric analysis were conducted and the result suggests that the correlation among corporate governance indicators of board structure (size-BRDSZ and independence-BRDID), audit quality (audit committee size (ADCMZ), the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4), board experience (i.e. experience-BRDEX) and financial reporting quality is 93.47%. The independent variables can explain the variation in the FRQDA by 54.29%. There is overall significance among the parameters measuring financial reporting quality as discretionary accruals of firm (FRQDA). Board structure (size-BRDSZ), board experience (experience-BRDEX) and the quality of external audit (EADTQ) have positive impact on the financial reporting quality measured by the discretionary accruals of firm (FRQDA) by 16.01, 0.05 and 2.75. However, independent directors on the board of firm (independence-BRDID) and audit quality (audit committee size (ADCMZ) negatively affect financial reporting quality measured by the discretionary accruals of firm (FRQDA) as much as 0.99 and 20.01. Guarantee Trust Bank Plc. among the five selected companies of study in Nigeria has better performance of financial reporting based on board structure (size-BRDSZ) and audit committee size (ADCMZ). This revealed that there is short run relationship among Audit quality (audit committee size (ADCMZ), and the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4) and board experience (i.e. experience-BRDEX) have not granger cause FRQDA. It further recommended that greater focus on corporate governance indicators so as to bring about global standard financial reporting in the Nigerian emerging market for investment opportunity.

scholarly journals Assessing Financial Reporting Quality of Listed Companies in Developing Countries: Evidence from Ghana

2019 ◽  
Vol 11 (9) ◽  
pp. 29
Author(s):  
Joseph Mbawuni
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Listed Companies ◽  
Sub Saharan Africa ◽  
Financial Reporting Quality ◽  
Financial Reports ◽  
Financial Reporting Standards ◽  
Sub Saharan

The adoption of International Financial Reporting Standards (IFRS) in Ghana is expected to improve the quality of financial reporting among companies in Ghana. This paper assesses the extent to which financial reports of companies listed on the Ghana Stock Exchange (GSE) meet financial reporting quality (FRQ) dimensions of IFRS. It was a descriptive study that employed two experienced professional chartered accountants who practice as independent auditors to use FRQ criteria to assess financial reports of 20 purposively selected companies listed on GSE for 2012 and 2013. Given the high inter-rater reliability (r = .96, 95% C.I., p < .0001), the findings indicate that, overall, FRQ of the listed companies meet FRQ standards by 56.48%. Generally, the financial reports were 60.95% faithfully represented, 51.01% relevant, 50.10% understandable, 40.09% comparable and 19.75% timely audited (or 80.25% untimely). Fundamental FRQ characteristics were more prevalent than enhancing FRQ. Poorly rated FRQ areas were in the use of historical cost as measurement basis, no use of graphs and tables to clarify information, no inclusion of comprehensive glossary, ratios and index, no information on adjustment in past accounting figures for future decisions, and no comparison of current and previous accounting periods and with those of other firms. The study concludes that FRQ of the listed companies is moderate but needs considerable improvement. Implications to theory, practitioners, policy makers and industry regulators are discussed. This study fills the dearth of empirical research in FRQ in IFRS-compliance companies in Sub-Saharan Africa in general and Ghana in particular.

scholarly journals INFLUENCE OF MANAGERIAL ABILITY ON FINANCIAL REPORTING QUALITY: EVIDENCE FROM NIGERIAN LISTED NON-FINANCIAL FIRMS

2020 ◽  
Vol 2 ◽  
pp. 25-40
Author(s):  
Aderemi Olalere Adebayo
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Secondary Data ◽  
Reporting Quality ◽  
Income Smoothing ◽  
Financial Reporting Quality ◽  
Managerial Ability ◽  
Financial Report ◽  
Financial Firms

Users of accounting information crave of quality financial reporting, by emphasising on the quality of the auditors neglecting the attribute of the managers. This study investigates the influence of managerial abilities on financial reporting in Nigerian listed non-financial sectors. The time series research design was employed by selecting 40 non-financial institutions as sample size between 2010 and 2017. Secondary data obtained from the financial report were analysed using correlation and logistic regression. It was found that managerial ability has an inverse relationship on financial reporting quality, which is consistent with the agency theory. The finding implied that managers employ their ability to income smoothing for the benefit of the organisation rather than the interest of the shareholders.

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