scholarly journals The impact of corporate governance mechanisms and IFRS on earning management in Saudi Arabia

Accounting ◽  
2021 ◽  
pp. 207-224
Author(s):  
Abdulwahid A. Hashed ◽  
Faozi A. Almaqtari
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Earning Management ◽  
Negative Effects ◽  
Corporate Governance Mechanisms ◽  
Positive Effect

The current research seeks to assess the influence of corporate governance mechanisms and IFRS adoption on compliance with IFRS, earning management, and financial reporting quality(FRQ). A sample comprises 102 Saudi listed firms for the period spanning from 2014 up to 2019 was used. The study used descriptive statistics, correlation analysis and multivariate analysis to estimate the results. The results reveal that while board size, board meeting and foreign ownership had negative effects on compliance with IFRS, board and audit committee independence exhibited a positive effect. Further, the results demonstrate that there was a sign of earning management under IFRS when a performance magnitude was used. The results also indicate that board and audit committee size, audit committee meeting and managerial ownership had significant negative effects on financial reporting quality however, board and audit committee independence showed a significant positive effect. Importantly, the results found that FRQ under IFRS was better than Saudi GAAP. The present research provides practical implications for policy makers, stock market authority, and academicians. More regulatory and disclosure requirements have to be imposed and financial reporting supervisory board need to be formed. The present research provides a novel contribution to IFRS compliance, earning management, financial reporting quality and corporate governance literature. It has a unique contribution as it attempts to investigate this issue in the context of an emerging economy and a recent IFRS adopter; Saudi Arabia that has special country-specific characteristics. The study also provides an evidence by investigating earning management and financial reporting quality under both sets of accounting standards; IFRS and Saudi GAAP.

scholarly journals Impact of corporate governance mechanisms on financial reporting quality: a study of Indian GAAP and Indian Accounting Standards

2020 ◽  
Vol 18 (4) ◽  
pp. 1-13
Author(s):  
Faozi A. Almaqtari ◽  
Abdulwahid Abdullah Hashed ◽  
Mohd Shamim ◽  
Waleed M. Al-ahdal
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Impact

The present study examines the impact of corporate governance mechanisms on financial reporting quality under Indian GAAP and Indian Accounting Standards (Ind. AS). A sample of 97 companies listed on the Bombay Stock Exchange is selected. Corporate governance mechanisms have been considered as independent variables, and financial reporting quality is the dependent variable. Corporate governance is measured by board effectiveness (board size, independence, diligence, and expertise), audit committee attributes (size, independence, diligence, and expertise), foreign ownership, and audit quality. Descriptive statistics, correlation, and OLS regression are conducted to estimate the results. The study results reveal that board characteristics and audit committee attributes, except for audit committee diligence, have a significant effect on financial reporting quality. However, the impact of board diligence and audit committee attributes is negative. Foreign ownership has no contribution to financial reporting quality, but audit quality has a significant effect. The findings of the study have considerable implications for regulators, policymakers, managers, investors, analysts, and academicians. More emphasis should be given to compliance with Ind. AS, and an oversight body for compliance with Ind. AS should be established. AcknowledgmentThis publication was supported by Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

scholarly journals The Triangle Defense for Financial Reporting Quality: The Interplay between Internal Auditing, the Audit Committee, and the External Auditor

Wahana ◽  
2020 ◽  
Vol 23 (1) ◽  
pp. 112-130
Author(s):  
Djoko Susanto
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Academic Research ◽  
Internal Audit ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Working Relationships ◽  
External Auditors ◽  
External Auditor

The internal audit function, audit committee, and external auditor are three crucial stakeholders of corporate governance that safeguard the quality of financial reporting. In this article, I discuss the interrelationships between these monitoring mechanisms. I also provide insights about what we have learned from academic research about the working relationships between these three governance entities. This article should be of interest to academic researchers as well as to corporate stakeholders, which include management, investors, regulators, and Dewan Komisaris members. Future researchers can make use of this article as they contribute more work in areas related to auditing, monitoring and corporate governance, and financial reporting quality. Insights from this article can also guide corporate stakeholders to assess the effectiveness of the internal audit, audit committee, and external auditors in their organizations.

scholarly journals The Impact of Audit Committee Performance and Composition on Financial Reporting Quality in Jordan

2021 ◽  
Vol 12 (3) ◽  
pp. 55
Author(s):  
Qasim Ahmad Alawaqleh ◽  
Nashat Almasri
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Work Performance ◽  
Stock Exchange ◽  
Internal Audit ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Governance System ◽  
The Impact

The corporate governance literature indicates efforts to investigate the role of the audit committee (AC) in improving the financial reporting quality (FRQ) after the emergence of financial scandals in many countries in the world, inclusive Jordan. To date, empirical findings are inconclusive enough to address all audit committee characteristics regarding its competency and responsibilities by employing a questionnaire to collect data about this relationship. Thus, this study measures the correlation between AC (performance and composition) and FRQ of manufacturing corporations registered on the Amman Stock Exchange (ASE). To test this impact empirically, the target population was financial managers, audit committee members, and internal audit managers who are working in manufacturing corporations listed on the (ASE). According to the coefficient (β), the independent variables (Audit Committee Performance and Audit Committee Composition influence the dependent variable FRQ. This research recommends that firms enhance the audit committee work performance and composition to ensure audit committee members effectively enhance the FRQ audit committee is a vital mechanism of the firm's corporate governance system.

The Audit Committee as Component of Corporate Governance

2021 ◽  
pp. 188-215
Author(s):  
Sana Masmoudi Mardessi ◽  
Yosra Makni Makni Fourati
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Theoretical Perspective ◽  
Reporting Quality ◽  
Theoretical Background ◽  
Fraudulent Financial Reporting ◽  
Corporate Governance Mechanisms ◽  
Financial Scandals ◽  
Main Component

Recently, numerous financial scandals (WorldCom, Enron, Parmalat, eToys) have shown that plentiful companies produce manipulated financial information. Consequently, regulators have prescribed corporate governance structures to protect investors and to avoid fraudulent financial reporting which are likely to control managers and limit their opportunistic behavior. Thus, there has been much debate over the extent to which corporate governance is playing a crucial role in increasing financial reporting quality from the theoretical perspective of agency theory, signaling theory, and stakeholder theory. This chapter aims at scrutinizing the internal and external mechanisms of corporate governance mainly the audit committee in the Dutch context. Firstly, the authors expose the numerous corporate governance mechanisms. Secondly, they focus on the audit committee as the main component of corporate governance, and they present the theoretical background, the role, and the characteristics of audit committee. Eventually, they exhibit the regulatory background of the Dutch context of the audit committee.

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 Director Connectedness: Monitoring Efficacy and Career Prospects

2018 ◽  
Vol 53 (1) ◽  
pp. 65-108 ◽  
Author(s):  
Vincent J. Intintoli ◽  
Kathleen M. Kahle ◽  
Wanli Zhao
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Accounting Conservatism ◽  
Financial Reporting Quality ◽  
Self Selection ◽  
Positive Effect

We examine a specific channel through which director connectedness may improve monitoring: financial reporting quality. We find that the connectedness of independent, non-co-opted audit committee members has a positive effect on financial reporting quality and accounting conservatism. The effect is not significant for non-audit committee or co-opted audit committee members. Our results are robust to tests designed to mitigate self-selection. Consistent with connected directors being valuable, the market reacts more negatively to the deaths of highly connected directors than to the deaths of less connected directors. Better connected directors also have better career prospects, suggesting they have greater incentives to monitor.

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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