scholarly journals Assessment of Earnings Conservatism in Malaysian Financial Reporting

2021 ◽  
Author(s):  
◽  
Khairul Anuar Kamarudin
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Family Firms ◽  
Good Governance ◽  
The United States ◽  
Systematic Difference ◽  
Cultural Issues ◽  
Corporate Board ◽  
Short Period ◽  
Significant Difference

<p><b>This study examines four influences on earnings conservatism of financial reporting in Malaysia. The study employs a sample of 3,126 firm-year observations of Malaysian listed companies over the period 2003 to 2008 and measures conservatism by the asymmetric timeliness of earnings measure due to Basu (1997). First, the study assesses the degree of earnings conservatism in reporting during the period following the institutional reforms which started after the 1997 Asian financial crisis. The results suggest that conservatism has increased with the reforms which contrasts with the findings of Ball et al. (2003) who find no evidence of earnings conservatism in Malaysia. Second, this study investigates the effect of the adoption of IFRS on the level of earnings conservatism. The results show no systematic difference in the level of earnings conservatism for the short period of one to two years before and after the adoption, suggesting that conservatism may not be specific to any particular set of accounting standards. Third, this study examines the effect of ownership structure on earnings conservatism. Reporting by family firms and widely-held firms exhibits earnings conservatism, but this is not the case for state-controlled firms. The analysis also shows no significant difference between the levels of earnings conservatism for family firms and widely-held firms. Additional tests show that family firms that are strategically controlled by a family, that is, where a member of the controlling family acts as CEO and chairman of the corporate board, report significantly higher earnings conservatism than other family firms.</b></p> <p>Finally, the study examines the link between corporate governance and earnings conservatism. Employing a comprehensive set of corporate governance variables, this study does not find any evidence to link corporate governance and earnings conservatism. This result is contrary to the evidence from developed markets, such as the United States and the United Kingdom, where firms with good governance are more timely in recognising bad news. This raises the possibility that the different ownership structures in Malaysia make corporate governance reforms less important. However, this suggestion is subject to environmental and cultural issues that have not been addressed in this study.</p>

scholarly journals Assessment of Earnings Conservatism in Malaysian Financial Reporting

2021 ◽  
Author(s):  
◽  
Khairul Anuar Kamarudin
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Family Firms ◽  
Good Governance ◽  
The United States ◽  
Systematic Difference ◽  
Cultural Issues ◽  
Corporate Board ◽  
Short Period ◽  
Significant Difference

<p><b>This study examines four influences on earnings conservatism of financial reporting in Malaysia. The study employs a sample of 3,126 firm-year observations of Malaysian listed companies over the period 2003 to 2008 and measures conservatism by the asymmetric timeliness of earnings measure due to Basu (1997). First, the study assesses the degree of earnings conservatism in reporting during the period following the institutional reforms which started after the 1997 Asian financial crisis. The results suggest that conservatism has increased with the reforms which contrasts with the findings of Ball et al. (2003) who find no evidence of earnings conservatism in Malaysia. Second, this study investigates the effect of the adoption of IFRS on the level of earnings conservatism. The results show no systematic difference in the level of earnings conservatism for the short period of one to two years before and after the adoption, suggesting that conservatism may not be specific to any particular set of accounting standards. Third, this study examines the effect of ownership structure on earnings conservatism. Reporting by family firms and widely-held firms exhibits earnings conservatism, but this is not the case for state-controlled firms. The analysis also shows no significant difference between the levels of earnings conservatism for family firms and widely-held firms. Additional tests show that family firms that are strategically controlled by a family, that is, where a member of the controlling family acts as CEO and chairman of the corporate board, report significantly higher earnings conservatism than other family firms.</b></p> <p>Finally, the study examines the link between corporate governance and earnings conservatism. Employing a comprehensive set of corporate governance variables, this study does not find any evidence to link corporate governance and earnings conservatism. This result is contrary to the evidence from developed markets, such as the United States and the United Kingdom, where firms with good governance are more timely in recognising bad news. This raises the possibility that the different ownership structures in Malaysia make corporate governance reforms less important. However, this suggestion is subject to environmental and cultural issues that have not been addressed in this study.</p>

Contemporary issues in financial reporting, auditing and corporate governance

2013 ◽  
Author(s):  
Noor Afza Amran
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Ethnic Diversity ◽  
Good Governance ◽  
Internal Auditors ◽  
Corporate Managers ◽  
Auditor Choice ◽  
External Auditors ◽  
Expectation Gap ◽  
Corporate Social

Contemporary Issues in Financial Reporting, Auditing and Corporate Governance offers theoretical and empirical background on three fundamental areas of accounting, namely financial reporting, auditing and corporate governance.This book is written in a clear and reader-friendly manner to create readers interest in the central issues of discussion. The uniqueness of this book is in its extensive coverage of national and internationally-oriented issues of financial reporting, auditing and corporate governance. This book is ideal for accounting and business related courses at upper undergraduate and post-graduate levels. With its broad coverage, the book should also be of interest to academicians, professionals, corporate managers, regulatory bodies and researchers.The articles written in this book are: Corporate Social Responsibility and Post-Crisis StrategyEmployee Stock Options Popularity of Financial Ratios in the Annual ReportsThe Relationship between Pension Funds and Dividend PayoutDoes Audit Firm Merger Add Value to Its Clients? Co-operation between Internal and External Auditors: From the Perspective of Internal Auditors in Malaysian Local Authorities Auditor Choice: Events and TheoriesThe Global Audit Expectation Gap: Within and between Muslim CountriesOwnership Holdings: Selected Malaysian Family Businesses Ethnic Diversity in Malaysian Initial Public OfferingsCEO Succession in Malaysian PLCs: Does Firm Characteristic Make a Difference?A Framework of Good Governance: Lessons for the Inland Revenue Board Malaysia.

Financial accounting scandals and the reform of corporate governance in the United States and in Italy

2017 ◽  
Vol 17 (1) ◽  
pp. 77-88 ◽  
Author(s):  
Daniel P. Sorensen ◽  
Scott E. Miller
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Financial Reporting ◽  
The United States ◽  
Class Action ◽  
Financial Accounting ◽  
Private Enforcement ◽  
Content Type ◽  
Accounting Scandals ◽  
The Usa

Purpose In the 1990s and beginning of the next decade, a series of financial accounting scandals occurred in the United States (USA or US) and in several other countries of the world. The USA and Italy (among others) responded with legislation to reform financial reporting and corporate governance in these jurisdictions. This paper aims to compare the regulatory response of Italy to that of the USA. Design/methodology/approach This paper includes a review of relevant literature and evaluation of the actions of the regulatory authorities. Findings In the case of the financial reporting crises, the rapid response put the USA into the role of the “first mover” with the European Union (EU) reacting to US initiatives and eventually converging to a large degree with the provisions of the US legislation. Italy has adopted many of the same regulatory reforms as the USA and has added some reforms that are directed to the specific needs to Italy. Research limitations/implications In conjunction with legislative initiatives like Sarbanes-Oxley, private enforcement mechanisms, such as shareholder class action suits in the USA, play an important role in discouraging and punishing financial accounting fraud. Practical implications In the absence of significant reforms of the Italian private enforcement system, corporate governance abuses and the potential for accounting scandals may still be persistent. As a whole, cooperative efforts continue between the USA and the EU. Such efforts are needed more and more, as companies become increasingly globalized. Originality/value This paper provides comparison and evaluation of corporate governance reform efforts in the USA and Italy.

scholarly journals Corporate governance in the financial services sector of small island economies: A case study of Mauritius

2007 ◽  
Vol 4 (3) ◽  
pp. 266-278 ◽  
Author(s):  
Pran Krishansing Boolaky
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Financial Services ◽  
Good Governance ◽  
Financial Sector ◽  
Insurance Companies ◽  
Small Island ◽  
Services Sector ◽  
Financial Services Sector ◽  
Corporate Governance Code

This study investigates the practices of corporate governance in the financial services sector of small island economies with special reference to banks and insurance companies in Mauritius with a view to assess the level of compliance. The financial sector is today an important economic pillar on which the government is relying given the imminent recession in the sugar industry. In this respect financial institutions play a key role because they are the core set of the financial sector. It is therefore important for people to have confidence in both banks and insurance companies of their country. This is possible by ensuring compliance with good governance. In Mauritius, the Central Bank has issued its guidelines on good corporate governance for banks and this guide is made in line with the Corporate Governance Code issued by the National Committee on Corporate Governance. Banks are also required to comply with the codes as per the Banking Act 2004 and the Financial Reporting Act 2004. In a similar vein insurance companies should comply with the National Code on Corporate Governance and relevant laws related to good governance of insurance business, such as the Insurance Act 2005, the Financial Services Commission guidelines on Corporate Governance and the Financial Services Development Act 2002. In addition insurance companies should also comply with the Companies Act 2001 and the Financial Reporting Act 2004. This paper initially reports on the practice of corporate governance in the financial services sector of small island economies by drawing data from the Financial Sector Assessment Programme of the International Monetary Fund. A content analysis of the annual reports of companies in the sector is used to assess the level of compliance to corporate governance code in Mauritius and concludes that compliance rate is above 70% as regards board’s composition, audit committee, disclosure of policies and practices. This study reports that there are few cases of noncompliance with the National Code but good governance is necessary in the financial services sector to inspire stakeholders confidence.

Earnings Management and Corporate Governance in Family Firms

2019 ◽  
pp. 127-153
Author(s):  
Elisabete Vieira ◽  
Mara Madaleno
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Family Firms ◽  
Management Practices ◽  
Corporate Board ◽  
Listed Firms ◽  
Big 4 ◽  
Ownership Effect ◽  
And Control

Earnings management and corporate governance relationships are examined for a sample of 49 Portuguese listed firms considering an unbalanced panel for the period 2002-2017, using panel corrected standard errors models and considering the family ownership effect. Empirical findings reveal that there is a positive relationship between corporate board independence and earnings management and that the presence of women on board decreases earnings management practices. Results are consistent with the hypothesis that earnings management practices are lower in family firms than in non-family firms. Size, being audited by the Big 4 companies, return on assets, loss, and the existence of an audit committee on board influence positively earnings management, but leverage, age, and ownership control are negatively related to earnings management. Results indicate that further auditing and control is necessary for Portuguese listed companies leading to strict recommendations to be followed by policymakers regarding control of these firms.

scholarly journals Snapshot and Trends of Corporate Governance Research in the Past 5 Years: Statistics and Visual Analysis Based on CiteSpace

2020 ◽  
pp. 120-129
Author(s):  
Oleh Pasko ◽  
◽  
Fuli Chen ◽  
Xuefeng Yao ◽  
◽  
...  
Keyword(s):  
Corporate Governance ◽  
Family Firms ◽  
Visual Analysis ◽  
Emerging Market ◽  
Academic Research ◽  
The United States ◽  
Current Status ◽  
Future Research ◽  
The Past ◽  
Research Hotspots

Corporate governance is not only one of the important issues of modern enterprise management, but also a hot topic in academic research. Bibliometric analysis of the current status of global corporate governance research in the past five years can help researchers and decision-makers grasp the main trends in corporate governance at present and in the future. The purpose of this research is to analyze the current status, hot spots and trends of corporate governance research in the past five years. Using the core collection of the WOS database as the data source, we searched English language journals related to corporate governance and obtained 607 literature search results. We utilize bibliometric methods and use CiteSpace to conduct statistical analysis and visual analysis. Through statistical literature publication year, country (region), author and literature citation situation, draw keyword co-occurrence map, research hotspot map, clustering map, burst hotspot map, systematically show the corporate governance research field in the past 5 years Basic information, research hotspots and development trends.The research results show that the number of corporate governance-related documents has continued to increase in the past five years. The United States, the United Kingdom, China, Spain, and Australia are the five countries with the largest number of corporate governance studies. The top 5 most cited authors are M.C. Jensen, A. Shleifer, E.F. Fama, R.La. Porta and P. Gompers. Among the top 10 most cited documents, the most cited are 178 words and the least cited 65 times. Research hotspots in corporate governance include agency theory, emerging market, capital structure, family firms, and real earnings management. Future research trends include merger, ownership concentration, equity and institution.

scholarly journals The Effect of Integrated Firm’s Reporting on Firm’s Performance

2020 ◽  
Author(s):  
Yavida Nurim ◽  
Cipto Wardoyo ◽  
Sri Astuti ◽  
Zuhrohtun .
Keyword(s):  
Corporate Governance ◽  
Decision Maker ◽  
Financial Reporting ◽  
Good Governance ◽  
Sustainability Reporting ◽  
Sustainability Index ◽  
Agency Conflict ◽  
Concentrated Ownership ◽  
Primary Users ◽  
Good Corporate Governance

This study investigates the effect of integrated firm’s reporting on firm’s performance. The integrated financial reporting contains of financial, good corporate governance (GCG) and sustainability reporting that shows company’s responsibility to capital providers, environment and social. The important question is whether more disclosure indicates more informative for decision maker. Therefore, it is important to identify which reporting useful for primary users. This study examines 108 public comphanies that granted ISRA (Indonesia Sustainability Reporting Award) from 2013-2017 for firm’s performance, GCG index, and sustainability index. The result shows that information for capital providers can be used for investment and credit decision. This finding indicates company faces agency conflict, so company’s disclosure dedicates for primary users, namely creditor and shareholder. This finding also indicate that earnings more informative than good corporate governance and sustainability reporting. It may show the concentrated ownership in Indonesia encourages management to behave less aggressive. Keywords: Tobin’s Q, integrated firm’s reporting, good governance, sustainability reporting, earnings

scholarly journals The Changing Facets of Corporate Governance and Corporate Social Responsibilities in India and their Interrelationship

2015 ◽  
Vol 7 (3) ◽  
pp. 6-16
Author(s):  
P.K. Haldar
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Business Strategy ◽  
Good Governance ◽  
Social Issues ◽  
Corporate Board ◽  
Ceo Duality ◽  
Large Group ◽  
Corporate Social

CG and CSR can be described as two sides of the same coin. Better governance leads the corporates to behave responsibly for the wellbeing of all the stakeholders. CSR is the medium through which corporates address the large group of stakeholders. Corporate Social Responsibility (CSR) moving far ahead from its age old domain of philanthropy and charity has now reached to a new hallmark of Corporate responsiveness and action to social issues and demand for sustainability in order to advance further towards a new era of collective future action for factoring the sustainable business strategy for good governance and development of the society and its people. The recent changing in the laws in India related to CSR and CG practices in India triggers this study to determine the relationship between them and also measure the influence of governance attributes on CSR practices of Indian corporates. The BSE SENSEX companies in India are the leaders in good governance practices and also the flag bearers in carrying out major CSR activities even when the CSR was not mandatory in India. The influence of corporate board attributes like Board Size, Board independent, Chairman-CEO duality, Female representative in corporate board, multiple directorships, and Promoter and directors shareholding on Corporate Social Responsibility measured through multiple regression analysis. The results revealed that chairman-CEO duality and the present of female directors in corporate board significantly influence of CSR contribution. Before generalization of the result of study further research could be undertaken taking a large group of Indian companies and wider corporate governance variables.

scholarly journals Effective Corporate Governance Mechanisms, Ownership Structure and Financial Reporting Quality: Evidence from Oman

2019 ◽  
Vol 14 (3) ◽  
pp. 121-154
Author(s):  
Muneer Rajab Amrah ◽  
◽  
Mohammed Mahdi Obaid ◽  
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Family Firms ◽  
Reporting Quality ◽  
Business Environment ◽  
Financial Reporting Quality ◽  
Sultanate Of Oman ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Governance Effectiveness

This study aimed to examine the relationship between corporate governance effectiveness and financial reporting quality among family and non-family owned companies in the Sultanate of Oman. This study used a panel dataset for 68 companies listed on the Muscat Securities Market for 6 years from 2013 to 2018. The study contributes to the literature by extending previous financial reporting quality with a consideration of the Sultanate of Oman business environment where family ownership control is more common. Additionally, this study contributes by using a composite measure of corporate governance mechanisms to capture the combined effect of corporate governance effectiveness on the propensity of financial reporting quality, based on the agency's theoretical framework. This study is based on the difference between family and non-family owned firms with Type I and Type II agency problems, with differences in ownership and control. This study contributes to the literature by examining the influences of corporate governance effectiveness on financial reporting quality, which is expected to be different between family and non-family firms. The empirical results indicate that the association between corporate governance effectiveness and its financial reporting quality is positive and significant for both, the full sample as well as the non-family firms. However, this relationship appears to be weaker for family owned firms. Keywords: corporate governance effectiveness, financial reporting quality family and non-family firms, Oman

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