scholarly journals Relationship between Earning Multiples, Corporate Governance and Earnings Management Practices: An Empirical View with a Mediation Analysis

2019 ◽  
Vol IV (I) ◽  
pp. 387-395
Author(s):  
Syeda Faiza Urooj ◽  
Muhammad Anees Khan ◽  
Muzammal Ilyas Sindhu
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Management Practices ◽  
Negative Impact ◽  
Positive Impact ◽  
Random Effect ◽  
Random Effect Model ◽  
Mediation Process ◽  
New Findings ◽  
Significant Negative Impact

This paper investigated the effect of corporate governance in improving the earnings multiple and reducing the discretionary accruals. This study developed four econometrics models. Random effect model employed for examining the first three econometric models, while for the fourth econometric model study used Andrew F. Hayes mediation process. Results suggest that BOD size, BOD meetings and audit committee size has a significant positive impact on earnings multiples, while earnings multiples have a negative impact on dictionary accrual. Moreover, BOD size and audit committee size has a significant negative impact on dictionary accrual, whereas BOD meetings and employee ownership has a significant positive impact on dictionary accrual. The results further revealed the novel link that earnings multiples partially mediate the relationship between corporate governance variables and dictionary accrual. The new findings provide important insights for all the stakeholders like government, practitioners, academia, researchers, banks, Bursa Malaysia, security commission and public listed companies.

A Study on impact of Forensic Audit towards Investigation and Prevention of Frauds

2021 ◽  
pp. 186-192
Author(s):  
Nandini N S ◽  
Ajay R
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Negative Impact ◽  
Internal Audit ◽  
Descriptive Statistics ◽  
Theoretical Research ◽  
Financial Fraud ◽  
Corporate Failure ◽  
Significant Negative Impact ◽  
Regression Correlation

This study is on impact of forensic audit towards investigation and prevention frauds in any financial performances or corporate companies. The incessant financial Fraud resulting to corporate collapse and the failure of the statutory audit to detect and prevent fraudulent activities which had led to the impoverishment of investors had given rise to need for forensic auditor. In view of the above this paper considers the impacts of forensic auditor on corporate governance. The study was a theoretical research which considered the roles of forensic auditors in combating fraudulent activities, distinction of forensic auditor and statutory auditor, characteristic of forensic auditor and impact of forensic auditor on corporate governance. Data generated were analyzed using charts, graphs, tables and regression. Our findings revealed that forensic audit has a significant negative impact on number of fraud cases, number of staff involved in fraudulent activities and data collected with the sample size of 125 respondents through the well-structured questionnaires from the Auditors, Accountants, Managers, Professional Accountants and Accounting Knowledgeable persons with this data we have used SPSS Methodology to find the Regression, Correlation Coefficient, Descriptive statistics, Reliability test, Anova, Factor analysis. From studies carried out this paper is forensic auditors having improved management accountability, strengthened external auditor’s independence and assisting audit committee members in carrying out their oversight function by providing them assurance on internal audit report have impacted positively to corporate governance, thereby reducing corporate failure and impoverishment of investors.

PERANAN GOOD CORPORATE GOVERNANCE TERHADAP KEPATUHAN PENGUNGKAPAN TRANSAKSI PIHAK BERELASI

2021 ◽  
Vol 7 (2) ◽  
pp. 157-174
Author(s):  
Grace Olivia ◽  
Dwi Jaya Kirana ◽  
Ekawati Jati Wibawaningsih
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Random Effect ◽  
Random Effect Model ◽  
Control Variable ◽  
Manufacturing Companies ◽  
Purposive Sampling ◽  
Related Party Transactions ◽  
Good Corporate Governance ◽  
Effect Model

ABSTRAKPenelitian ini bertujuan untuk mengetahui pengaruh dari good corporate governance terhadap kepatuhan pengungkapan transaksi pihak berelasi pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia pada periode 2017–2019. Sampel dipilih menggunakan metode purposive sampling dan diperoleh sebanyak 117 perusahaan manufaktur. Data yang digunakan adalah data sekunder berupa laporan tahunan perusahaan. Model penelitian menggunakan Random Effect Model. Hasil penelitian menunjukkan komite audit dari komisaris independen berpengaruh positif terhadap pengungkapan transaksi pihak berelasi, sedangkan variabel dependen lain tidak berpengaruh. Ukuran perusahaan sebagai variabel kontrol tidak berpengaruh terhadap pengungkapan transaksi pihak berelasi. Pengungkapan transaksi pihak berelasi berisi informasi seberapa besar posisi keuangan perusahaan dapat dipengaruhi oleh transaksi dan saldo dengan pihak berelasi sehingga dapat meminimalisir masalah agensi berupa asimetri informasi di antara pemegang saham. Pengungkapan transaksi pihak berelasi dapat menghasilkan keputusan investasi yang terbaik bagi pemegang saham.ABSTRACTThis study aims to determine the effect of good corporate governance on disclosure compliance of related party transactions in manufacturing companies listed on the Indonesia Stock Exchange in the 2017–2019 period. The sample was selected using purposive sampling method and obtained as many as 117 manufacturing companies. The data used is secondary data in the form of the company's annual report. The research model uses the Random Effect Model. The study conclude only the audit committee of independent commissioners has a positive influence on the disclosure of related party transactions, while the other dependent variables have no effect. Firm size, as a control variable, has no effect on disclosure of related party transactions. Disclosure of related party transactions contains information on how much the company's financial position can be affected by transactions and balances with related parties so as to minimize agency problems in the form of information asymmetry among shareholders. Disclosure of related party transactions can result in the best investment decisions for shareholders.

Does cultural value affect board efficacy? Insights on international corporate governance

2017 ◽  
Vol 59 (6) ◽  
pp. 1257-1268 ◽  
Author(s):  
Mohammad Nurunnabi
Keyword(s):  
Corporate Governance ◽  
Negative Impact ◽  
Positive Impact ◽  
Religious Diversity ◽  
Cultural Value ◽  
Corporate Ethics ◽  
Content Type ◽  
The World ◽  
Governance Practices ◽  
Significant Negative Impact

Purpose This study aims to investigate how culture can either reinforce or attenuate the board efficacy (a key element of corporate governance). Design/methodology/approach The study uses the data from the World Economic Forum (2006-2014) of 69 countries. The data were restricted to 69 countries because Hofstede et al. (2010) provided cultural value data from 111 countries. However, the data from 42 countries were incomplete for Hofstede et al.’s four dimensions. Findings The study is the first to show that more religious diversity has a significant negative impact on stronger board efficacy in evaluating corporate governance practices. The results also indicate that more uncertainty avoidance in a country has a significant negative impact and corporate ethics and auditing standards have a positive impact on board efficacy. Originality/value The study extends Hofstede et al.’s (2010) cultural value by incorporating religious diversity and corporate ethics as cultural variables in explaining board efficacy in corporate governance literature. The Organisation for Economic Co-operation and Development, the World Bank and the International Monetary Fund should focus on cultural factors while developing a single set of Corporate Governance Code worldwide.

scholarly journals Role of Corporate Governance in Bank’s Efficiency in Pakistan

2020 ◽  
Vol 15 (1) ◽  
pp. 243-258 ◽  
Author(s):  
Saif Ullah
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Banking Sector ◽  
Negative Impact ◽  
Operating Efficiency ◽  
Managerial Ownership ◽  
Significant Negative Impact ◽  
Banking Structure ◽  
Positive Effect

AbstractThe purpose of this research paper is to explore the role of corporate governance of banks (independence of the board, board size, CEO duality, audit committee independence, managerial ownership) to boosting up the bank’s efficiency. The study uses bank size, macro-economic conditions, banking structure and economic freedom as control variables. The sample size of the study is 21 Pakistani banks for the period of 2007-2016 and fixed effect panel regression estimation technique is used for data analysis. The results suggest that corporate governance has a statistically significant negative impact on management efficiency, positive effect on profit efficiency and cost efficiency of the banks. Moreover, the findings show that operating efficiency turned out to have a statistically insignificant relationship with corporate governance. Reforms of corporate governance should be adopted efficiently and effectively to boost the banking sector efficiency.

scholarly journals Determinants of Sustainability Reporting of Islamic Banks in Emerging Countries

2020 ◽  
Vol 11 (2) ◽  
pp. 149-161
Author(s):  
Afifah Oki Nilasakti ◽  
Falikhatun Falikhatun
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Random Effect ◽  
Random Effect Model ◽  
Supervisory Board ◽  
Sustainability Reporting ◽  
Estimation Model ◽  
Financial Service Authority ◽  
Slack Resources

This study aims to determine the effect of Islamic corporate governance and slack resources on sustainability reporting of Islamic Commercial Banks in Indonesia and Malaysia from 2015-2018. The corporate governance in this study consists of sharia supervisory board, the size, board of directors meeting, and audit committee. This is a quantitative study that used secondary data such as the annual and sustainability report. The reporting proxy was measured by the content analysis method which consisted of 78 items from the six dimensions adopted disclosure of AAOIFI. Furthermore, the analysis technique used was panel data regression with Random Effect Model (REM) as the estimation model. The results showed that the sharia supervisory board has a negative effect on sustainability reporting, while the board size, audit committee, and slack resources have a positive effect. Meanwhile, the board of directors' meeting has no effect on sustainability reporting. Therefore, the related government agencies such as Otoritas Jasa Keuangan (Financial Service Authority/FSA) and Bank Negara Malaysia are able to consider that the regulation related to the composition of sharia supervisory board for banking is in line with international ideal standards. 

scholarly journals The Determinants of Banks’ Liquidity in Vietnam

2017 ◽  
Vol 33 (2) ◽  
Author(s):  
Tam Le
Keyword(s):  
Opportunity Cost ◽  
Commercial Banks ◽  
Negative Impact ◽  
Positive Impact ◽  
Random Effect ◽  
Random Effect Model ◽  
Banking System ◽  
Open Market ◽  
Trade Off ◽  
Interest Rate Policy

This paper is aimed to identify the key determinants of commercial banks’ liquidity in Vietnam, testing the hypotheses of trade-off between bank liquidity and profitability. The random effect model (REM) is applied with data of 140 observations from 20 Vietnamese commercial banks in period 2008 to 2014. The key findings are: First, there is no trade-off between liquidity and profitability, as banks have better profitability will pay more attention to keeping liquidity in safe level. Second, interest rate policy has good and positive impact on bank liquidity, implying the importance of discount window and open market operation in providing liquidity to commercial banks. Third, however, opportunity cost of keeping liquid assets has negative impact on banks’ liquidity, which means that liquidity buffer should reflect the opportunity cost of keeping liquid assets instead of loans. Fourth, bank size is negatively related with banks’ liquidity, which means that smaller banks are more concerned about the liquidity problems than big banks. This is the signal for Vietnamese policy makers to start avoiding the “too big to fail” problem when restructuring the banking system and the plan for increasing the bank size to regional and international levels. Lastly, GDP growth has negative impact on banks’ liquidity. The better is the economic investment opportunities, the less the chance for banks to keep more liquidity. Customers will request more debts, while the demand of ithdrawing cash from banks will be lower. Therefore, managing bank liquidity in Vietnam needs to pay attention to these characteristics. Key words: bank liquidity, determinants, liquid assets, opportunity cost, profitability.

scholarly journals Pengaruh Audit Internal, Struktur Modal, Dan Good Corporate Governance Terhadap Kinerja Keuangan

2020 ◽  
Vol 2 (1) ◽  
pp. 2001-2019
Author(s):  
Amara Meidiana ◽  
Erinos NR
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Financial Performance ◽  
Sampling Method ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Internal Audit ◽  
Good Corporate Governance ◽  
Significant Negative Impact

Economic growth according to business field said that financial sector in 2016 to 2018 were decreased year by year. It indicates that there was a financial performance’s decline in financial sector’s companies. In order to increase financial performance, we need to find out factors that could accelerate financial performance’s potential. Internal audit, capital structure, and good corporate governance are independent variables that will be tested in this research for their impacts on financial performance. This research uses ROA, ROE, & NPM combination as internal audit’s proxies and DAR, DER, & LDER as capital structure’s proxies which are still minor in prior researchs. The purpose of this research is to test how far internal audit, capital structure, and good corporate governance could affect financial performance partially. This research was tested on financial sector’s companies that listed on Indonesia Stock Exchange in 2016 to 2018 with 129 samples using purposive sampling method with judgment. The results of this research proved that internal audit had insignificant positive impact on financial performance, capital structure had significant negative impact on financial performance, while good corporate governance had significant positive impact on financial performance with significant level 0,005 which is had not reach the maximum standard 0,05 yet.

scholarly journals Corporate Governance and Company Value: A Manufacturing Industry Case Study

2021 ◽  
Vol 4 (4) ◽  
pp. 450-461
Author(s):  
Helma Malini ◽  
Dyen Natalia ◽  
Giriati Giriati
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Audit Committee ◽  
Manufacturing Industry ◽  
Random Effect ◽  
Random Effect Model ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Book Value ◽  
The Impact

The purpose of this research is to look into the impact of corporate governance in the Indonesia Stock Exchange's Manufacturing Industry. Panel data from 73 Manufacturing Industry companies on the Indonesia Stock Exchange from 2014 to 2018 with a total of 365 observations of data whose research results were analyzed using panel data regression analysis with the Random Effect Model approach. Institutional ownership has a positive effect on Tobin's q and market book value, according to the study's findings. Tobin's q and market book value are negatively affected by foreign ownership. Meetings of the Board of Commissioners and the Audit Committee have a negative impact on stock price returns. Meetings of the board of directors, audit committee, and board of commissioners were found to have no impact on the value of the company. On the basis of these findings, it can be concluded that the results of testing the independent variables on the dependent are inconclusive and should be questioned further.

The Satyam Effect on Related Party Loans in India

2021 ◽  
pp. 0148558X2110481
Author(s):  
Narendra Nath Kushwaha ◽  
Bipin Kumar Dixit
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Negative Impact ◽  
Related Event ◽  
Public Companies ◽  
External Monitoring ◽  
Significant Negative Impact ◽  
Computer Services ◽  
Using Data ◽  
The Impact

We examine the impact of the failure of Satyam Computer Services Ltd. (“Satyam”), a major corporate governance related event in India, on related party loans of Indian public companies. Using data from a balanced panel of 794 firms for the years 2006–2012, we find that the Satyam failure had a significant negative impact on related party loans given by Indian firms. The average of net related party loans (as a proportion of total assets) declined from 2.37% in 2008 to 0.23% in 2010. Furthermore, the reduction in related party loans was more prominent in firms with lower levels of external monitoring. Finally, since prior research suggests that there was no significant Satyam effect on the frequency or attendance at audit committee meetings, our results suggest that there can be substantive changes in operational decisions without observable changes in governance.

Association Between Earnings Management and Corporate Governance Mechanisms: A Study Based on Select Firms in India

2020 ◽  
pp. 097215091988554
Author(s):  
Rajashri Chatterjee ◽  
Debdas Rakshit
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Negative Impact ◽  
Positive Impact ◽  
Governance Mechanisms ◽  
Robust Model ◽  
Big 4 ◽  
Corporate Governance Mechanisms ◽  
Strong Negative Association

This article initially attempts to search for a robust model for the estimation of discretionary accruals (proxy for earnings management) of select manufacturing firms in India. The two models from extant literature considered to search for a better model are the modified Jones model put forth by Dechow, Sloan, and Sweeney (1995 , The Accounting Review, 70, 193–225) and the Kasznik (1999 , Journal of Accounting Research, 37, 57–81) model. Subsequently the study aims at appraising the linkage between various corporate governance mechanisms and earnings management using panel data regression and employing Fisher’s probability test. The study reveals strong negative association of earnings management with the percentage of independent directors on the board and with diligence of the board members. However, it fails to accept the conjecture that percentage of promoters on the board has a positive impact on earnings management. The assumption that audit committee size has a negative impact on earnings management could not be established too. Furthermore, the study fails to draw any concrete relationship between earnings management and other governance mechanisms considered, such as board size, frequency of board meetings, CEO duality, audit committee independence, frequency of audit committee meetings and auditing by Big-4 auditors.

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