scholarly journals A Study of Association between Taiwan’s Corporate Governance Appraisal and Financial Performance: Evidence from Taiwan Listed Companies

2019 ◽  
Vol 12 (11) ◽  
pp. 66
Author(s):  
Li-Lun Liu ◽  
Yu-Ting Huang
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Performance ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Listed Companies ◽  
Accounting Firms ◽  
Taiwan Stock Exchange ◽  
Big 4 ◽  
Corporate Governance Quality

To enable all listed companies to gradually upgrade and implement corporate governance, the appraisals are promoted to assist investors through the comparison of corporate governance appraisal (CGA) in Taiwan’s market. Using a panel data is based on the companies listed on the Taiwan Stock Exchange during the period 2014-2016; this paper provides evidence that earnings management is affected negatively by corporate governance quality. This is expected to guide healthy competition between enterprises and strengthen corporate governance. Recent studies have pointed out that managers are more favorable to their actions due to weak corporate governance. While most studies explored the relationship between corporate governance and financial performance, few studies have included in corporate governance appraisal (CGA). This study examines how CGA in Taiwan listed companies will affect their earnings quality and this study uses earnings management (EM) as measure of financial performance. In addition, reference is made to the Big 4 accounting firms to explain the consequences of CGA and, specifically, its effect on the quality of financial statements. The empirical results show that CGA and earnings management have a significantly negative correlation. In addition, the CGA of companies audited by the Big 4 indicate that those with better earnings quality also conduct less earnings management.

scholarly journals Moderating Effects of Media Coverage and Corporate Governance on CSR-CFP Nexus-Evidence from Listed Companies on Taiwan Stock Exchange

2016 ◽  
Vol 8 (5) ◽  
pp. 190 ◽  
Author(s):  
Yuan Chang
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Media Coverage ◽  
Stock Exchange ◽  
Random Effect ◽  
Listed Companies ◽  
Regression Result ◽  
Taiwan Stock Exchange ◽  
Stage Estimation ◽  
The Relationship

Media coverage helps firm’s benevolent action under the sunlight (well-known by the public). Effective CEO incentive compensation and sound corporate governance align the interest of management with the firm by forming correct and efficient decision on positive-feedback social activities. This paper examines whether media coverage, compensation and corporate governance act as positive moderators for the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), namely, CSR-CFP nexus. Based on data of TWSE-listed companies during 2005-2009, regression result generally shows that higher CEO compensation strengthen positive relationship between firm’s CSR engagement and financial performance. Weaker corporate governance deteriorates positive CSR-CFP relationship. Media coverage has little influence on the relationship between CSR and CFP. Robustness checks such as fixed/random effect estimation, two-stage estimation and propensity score matching to control for selection bias yield similar outcome.

scholarly journals Earnings manipulations in politically influenced firms

2017 ◽  
Vol 15 (1) ◽  
pp. 65-71 ◽  
Author(s):  
Muhammad Sadiq ◽  
Zaleha Othman
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Listed Companies ◽  
Large Sample ◽  
Listed Firms ◽  
Political Influences ◽  
The Relationship

This paper investigates the relationship between political influences and earnings manipulations because little has been known about the relationship between both variables using multiple proxies. The authors measure earnings manipulation using models developed by Bhattacharya et al. (2003) and McNichols (2002), for a large sample of 129 listed firms in Pakistan Stock Exchange over the period 2009–2013. This study finds that politically influenced firms are involved in accruals earnings management and lack transparency, implying lower earnings quality. Our findings are consistent with prior studies, which show the positive relationship between political influences and earnings manipulations. However, the authors add contribution by using three proxies of political influences. The findings are useful for regulators to monitor earnings manipulations activities among public listed companies. In addition, the findings add to the growing literature in the field of corporate governance.

scholarly journals The effect of industry nuances on the relationship between corporate governance and financial performance: Evidence from South African listed companies

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Jonty Tshipa ◽  
Leon M. Brummer ◽  
Hendrik Wolmarans ◽  
Elda Du Toit
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
South African ◽  
Resource Dependence ◽  
Stock Exchange ◽  
Listed Companies ◽  
Company Performance ◽  
Johannesburg Stock Exchange ◽  
Good Corporate Governance ◽  
The Relationship

Background: Premised on agency, resource dependence and stewardship theories, the study investigates empirically the existence of industry nuances in the relationship between corporate governance and financial performance of companies listed in the Johannesburg Stock Exchange. Aims: The main objective of the study is to understand the relationship between internal corporate governance and company performance from the perspective of three distinct economic periods, as well as industry nuances, cognisant of endogeneity issues. Setting: South Africa, as an emerging African market, offers an interesting research context in which the corporate governance and financial performance nexus can be examined empirically. Method: A sample of 90 companies from the five largest South African industries, covering a 13-year period from 2002 to 2014 (1170 firm-year observations) was examined with three estimation approaches. Results: Two key trends emerged from this study. First, the relationship between corporate governance and company performance differed from industry to industry. Second, the association between corporate governance and company performance also changes during steady and non-steady periods, which is an indication that the nexus is driven by the state of the global economy and the type of the industry. Conclusion: Evidence from the study suggests that companies should be allowed to optimise rather than maximise their corporate governance options. This finding questioned the approach of the recently published King IV Code of Good Corporate Governance, which requires Johannesburg Stock Exchange-listed companies to ‘apply and explain’ as opposed to ‘apply or explain’ as pronounced by King III Code of Good Corporate Governance.

scholarly journals Earnings management and seasoned equity offerings: evidence from Taiwan started Go Incubation Board for Startup and Acceleration firms

2020 ◽  
Vol 17 (2) ◽  
pp. 183-197
Author(s):  
An-An Chiu ◽  
Shaio Yan Huang ◽  
Ling-Na Chen ◽  
Wei-Hua Lin
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Small And Medium Enterprises ◽  
Large Body ◽  
Seasoned Equity Offerings ◽  
Negative Consequences ◽  
Equity Offerings ◽  
Accounting Firms ◽  
Big 4 ◽  
Economic Journal

Although a large body of empirical research focuses on listed companies, less is done regarding small and medium enterprises. Under the authorities’ support, Taipei Exchange (TPEx) started Go Incubation Board for Startup and Acceleration Firms (GISA) in January 2014. This research yields insight into earnings management activities around seasoned equity offerings (SEO) based on GISA firms in Taiwan and the effectiveness of external corporate governance. Data for the study come from the GISA Market Observation Post System of TPEx and Taiwan Economic Journal. The results reveal that GISA firms with the incentives of raising funds are prone to upward accrual-based earnings management during SEO to avoid long-term negative consequences. Especially, firms with paid-in capital more than TWD (NT$) 30 million, higher fundraising amounts, or smaller-sized firms, tend to increase discretionary accruals. Finally, Certified Public Accountants (CPAs) and Big 4 accounting firms effectively serve as external corporate governance on mitigating earnings management. This study makes some contributions to GISA literature. First, expands the prior research, the different earnings management level before and listed on GISA, to the firms listed on GISA. Second, link up the relationship between the SEO and earnings management of GISA in Taiwan. Finally, it provides several contributions to regulators, for instance, the effectiveness of the counseling system provided by CPAs or Big 4 accounting firms. Also, the CPAs and Big 4 accounting firms serve as supervisors on corporate governance.

scholarly journals Leadership and Ethnicity in Public Companies in Malaysia

2007 ◽  
Vol 2 (2) ◽  
Author(s):  
Dominic Lai Yew Hock
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Chief Executive Officer ◽  
Stock Exchange ◽  
Chief Executive ◽  
Listed Companies ◽  
Business Culture ◽  
Foreign Direct Investments ◽  
Gross Margin ◽  
Leadership Structure

Corporate Governance gained prominence in Malaysia during the Asian financial crisis of 1997, which operated as a wake up call that the existing corporate governance structures in public listed companies were insufficient. In response, Kuala Lumpur Stock Exchange issued the Listing Requirements on 22 January 2001 to regain investors’ confidence and attract foreign direct investments. The Listing Requirements included a Code of Best Practices in Corporate Governance that favours the leadership structure of separate Chairman/Chief Executive Officer posts. Malaysia is a multi-racial country comprising predominantly of the indigenous Malays, the Chinese and the Indians. The Chinese in Malaysia continue to play a significant role in the economy. These Chinese practise a distinctive Chinese business culture in the running of their businesses. The literature reveals that the adoption of the prescribed leadership structure of separating the Chairman and Chief Executive Officer positions is not likely to improve the financial performance of Chinese controlled companies. An empirical research is conducted, using 218 Chinese controlled public listed companies in Malaysia. The data covered three years from 2001 to 2003. Financial performances of the companies were measured using return on equity, earnings per share, dividend per share, liquid asset per share and gross margin. t-test and Mann Whitney test were used. The results show that there has been widespread adoption of the leadership structure recommended under the Code by the sample companies. The results also show that adoption of the prescribed leadership structure under the Code has no significant impact on the financial performance of the sample companies.

scholarly journals Mandatory CSR Disclosure, CSR Assurance, and the Cost of Debt Capital: Evidence from Taiwan

2021 ◽  
Vol 13 (4) ◽  
pp. 1768
Author(s):  
Lopin Kuo ◽  
Po-Wen Kuo ◽  
Chun-Chih Chen
Keyword(s):  
Stock Exchange ◽  
Cost Of Debt ◽  
Accounting Firms ◽  
Taiwan Stock Exchange ◽  
Debt Capital ◽  
Big 4 ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Cost ◽  
The Impact

This study examined the impact of mandatory corporate social responsibility (CSR) disclosure, CSR assurance and the reputation of assurance providers (accounting firms) on the cost of debt capital. Our difference-in-difference research design in conjunction with univariate and multiple regression analysis was assessed using a large sample of firms listed on the Taiwan Stock Exchange and the Taipei Exchange. Our empirical results revealed that mandatory CSR assurance on CSR disclosure provided by accounting firms tended to reduce the cost of debt capital. However, contrary to expectations, the reputation of the accounting firm (Big 4 accounting firms vs. non-Big 4 accounting firms) tasked with providing CSR assurance did not have a significant effect on the cost of debt capital. These results have implications for firms seeking an assurance provider as well as for Big 4 accounting firms. These results also provide specific evidence relevant to government agencies seeking to update policies and extend the scope of mandatory CSR assurance to other environmentally sensitive industries.

scholarly journals The Effects of Good Corporate Governance and Audit Quality on Earnings Management

2017 ◽  
Vol 1 (1) ◽  
pp. 134
Author(s):  
Nujmatul Laily
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Management Practices ◽  
Audit Quality ◽  
Empirical Studies ◽  
Listed Companies ◽  
Accounting Firms ◽  
Good Corporate Governance ◽  
Dichotomous Variables ◽  
Big Four

<p>A number of previous empirical studies have attempted to reveal the existence of earnings management. However, a research that focuses on how to alleviate the earnings management practices committed by managers is still insufficiently available. This study is aimed to examine the effects of Good Corporate Governance (GCG) and audit quality on earnings management. The presence of Board of Commisioner and Audit Commitee in Indonesian Manufacturing Public Listed Companies serves as the proxy of GCG. On the other hand, KAP (public accounting firm) size, dichotomous variables and an assumption that big four auditors perform higher audit quality compared to non-big four auditor serve as the proxy of the audit quality. To echo the prior research, earnings management is measured by employing discretionary accruals modified by Jone (1995). 151 manufacturing listed companies were determined as the population and 86 public listed companies were eventually opted for the sample. Purposive sampling method was employed and regression was performed to analyze the data. The results showed that (1) accounting firms size does not yield significant effects on earnings management. It indicates that neither big four nor non-big four can significantly detect the existence of earnings management undertaken by manager through the audit they administer; (2) Board of Commisioner and Audit Commitee also do not generate significant effects on earnings management. It indicates that good corporate governance proxied by the existence of Board Commisioner and Audit Commitee do not necessarily alleviate the earnings management practices.</p><p> </p><p><strong>Keywords: </strong>Earnings management, audit quality, good corporate governance</p>

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