Corporate governance and accounting conservatism in Islamic banks

2019 ◽  
Vol 61 (5) ◽  
pp. 745-764 ◽  
Author(s):  
Ali R. Almutairi ◽  
Majdi A. Quttainah
Keyword(s):  
Corporate Governance ◽  
Accounting Conservatism ◽  
Islamic Banks

The Impact of Shariah Governance and Corporate Governance on the Risk Management Practices: Evidence from Local and Foreign Islamic Banks in Malaysia

2018 ◽  
Vol 15 (2) ◽  
pp. 1-20
Author(s):  
Sabri Embi ◽  
Zurina Shafii
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Management Practices ◽  
Principal Component ◽  
T Test ◽  
The Body ◽  
Primary Data ◽  
Islamic Banks ◽  
Shariah Governance ◽  
The Impact

The purpose of this study is to examine the impact of Shariah governance and corporate governance (CG) on the risk management practices (RMPs) of local Islamic banks and foreign Islamic banks operating in Malaysia. The Shariah governance comprises the Shariah review (SR) and Shariah audit (SA) variables. The study also evaluates the level of RMPs, CG, SR, and SA between these two type of banks. With the aid of SPSS version 20, the items for RMPs, CG, SR, and SA were subjected to principal component analysis (PCA). From the PCA, one component or factor was extracted each for the CG, SR, and RMPs while another two factors were extracted for the SA. Primary data was collected using a self-administered survey questionnaire. The questionnaire covers four aspects ; CG, SR, SA, and RMPs. The data received from the 300 usable questionnaires were subjected to correlation and regression analyses as well as an independent t-test. The result of correlation analysis shows that all the four variables have large positive correlations with each other indicating a strong and significant relationship between them. From the regression analysis undertaken, CG, SR, and SA together explained 52.3 percent of the RMPs and CG emerged as the most influential variable that impacts the RMPs. The independent t-test carried out shows that there were significant differences in the CG and SA between the local and foreign Islamic banks. However, there were no significant differences between the two types of the bank in relation to SR and RMPs. The study has contributed to the body of knowledge and is beneficial to academicians, industry players, regulators, and other stakeholders.

PENGARUH KONSERVATISMA AKUNTANSI TERHADAP EARNINGS RESPONSE COEFFICIENT (ERC) DENGAN CORPORATE GOVERNANCE SEBAGAI VARIABEL PEMODERASI

2008 ◽  
Author(s):  
Olliza Mayesti ◽  
Resti Yulistia Muslim
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Negative Influence ◽  
Accounting Conservatism ◽  
Managerial Ownership ◽  
Net Income ◽  
Manufacturing Companies ◽  
Earnings Response Coefficient ◽  
Response Coefficient ◽  
Earnings Response

The objective of this study is to examine whether corporate governance influence the relation between accounting conservatism and Earnings Response Coefficient (ERC). The accounting conservatism proxy used in this research is accruals obtained from differences between net income and cash flow. Sample consists of 31 manufacturing companies that listed in Indonesian Stock Exchange since 2003­2006. Hypotheses are examined by using multiple regressions. The result shows that there is a negative influence of accounting conservatism to Earnings Response Coefficient. Managerial ownership as a moderating variable did not affect the relation between accounting conservatism and Earnings Response Coefficient, but independent board of commissioner composition as a moderating variable affected the relation between accounting conservatism and Earnings Response Coefficient.

Pengaruh Islamic Social Reporting terhadap Profitabilitas (Return on Asset dan Return on Equity) Pada Bank Umum Syariah Di Indonesia

2019 ◽  
Vol 4 (2) ◽  
pp. 1
Author(s):  
Ana Santika
Keyword(s):  
Corporate Governance ◽  
Commercial Banks ◽  
Sampling Technique ◽  
Social Reporting ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Collection Method ◽  
Return On Equity ◽  
Social Environmental

The act of accuracy and prudence is very important in the company because is the factor that determines the sustainability of companies such as banking. This study aims to analyze the effect of Shariah Complaints towards the profitability of Islamic Banks in Indonesia. This type of research is quantitative. The data collection method used is the documentation method and library study method. The sampling technique uses purposive sampling with the criteria of Islamic commercial banks that publish annual-reports from 2013 to 2017 from 13 Islamic commercial banks (BUS) in Indonesia. The results of this study show that the Funding and Investment, Products and Services, Employees, Community or Social, Environmental, Corporate Governance simultaneously does not have influence significantly the ROE variable, but it does significantly influence to ROA. Means that the wider the Islamic social reporting of Islamic banking, the greater the profitability of Islamic banking. In addition, high profitability will encourage managers to provide more detailed information, because they want to convince investors of company profits and its compensation for management.

Conditional Conservatism and Audit Fees

2014 ◽  
Vol 29 (1) ◽  
pp. 83-113 ◽  
Author(s):  
Hye Seung (Grace) Lee ◽  
Xu Li ◽  
Heibatollah Sami
Keyword(s):  
Corporate Governance ◽  
Potential Benefit ◽  
Audit Fees ◽  
Accounting Conservatism ◽  
Audit Risk ◽  
Debt Contracting ◽  
Conditional Conservatism ◽  
Governance Quality ◽  
Corporate Governance Quality ◽  
The Impact

SYNOPSIS In this study, we examine the impact of conditional conservatism on audit fees and, more importantly, the influence of corporate governance on this relationship. Prior literature presents evidence regarding explanations for the existence and pervasiveness of accounting conservatism such as compensation and debt contracting, shareholder litigation, taxation, and accounting regulation. However, there is very limited evidence or discussion of the potential benefit of accounting conservatism on audit risk and thus audit fees, and how the potential benefit can be attenuated by corporate governance quality. Using a sample of firm-year observations over the period of 2004–2009, we provide evidence consistent with conditional conservatism and firms' commitment to such conservatism reducing their audit fees. However, our evidence shows that this reduction in audit fees is moderated by higher corporate governance quality. These results have implications for auditors, regulators, standard setters, and firms' managers. In addition, our study extends the literature on the determinants of audit fees. JEL Classifications: M41; M42; D81; D22.

Does corporate governance affect the performance of Islamic banks? New insight into Islamic countries

2020 ◽  
Vol 20 (6) ◽  
pp. 1073-1090 ◽  
Author(s):  
Ejaz Aslam ◽  
Razali Haron
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Positive Impact ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Method Of Moment ◽  
Content Type ◽  
Return On Equity ◽  
Islamic Countries ◽  
And Performance

Purpose Corporate governance plays a significant role to overcome agency issues and develop the culture of transparency and openness. In this context, this paper aims to examine how corporate governance mechanisms affect the performance of Islamic banks (IBs). Design/methodology/approach Stepwise, two-step system generalize method of moment estimation technique is used in the analysis in which control variables are added into the model sequentially. This study used data on 129 IBs from 29 Islamic countries (Middle East, South Asia and Southeast Asia) during the period of 2008 to 2017. Findings The findings suggest that the audit committee (AUDC) and Shariah board (SB) have positive impact on the performance of IBs (return on assets and return on equity). However, board size and risk management committee have negative and significant effect on the performance of IBs. CEO duality and non-executive directors have mixed relationship with the performance of IBs. These results support the argument that IBs need to improve their financial performance through appropriate governance mechanism. Research limitations/implications The findings of the study added a new dimension to the governance research that could be a valuable source of knowledge for policymakers and regulators to improve the existing governance mechanism for better performance of IBs. Originality/value The study fills the gap in the literature by addressing the issue of corporate governance on performance of IBs across countries. Agency theory is discussed to explain the relationship between corporate governance mechanism and performance.

Accounting conservatism, corporate governance and political connections

2017 ◽  
Vol 25 (2) ◽  
pp. 288-318 ◽  
Author(s):  
Nor Farizal Mohammed ◽  
Kamran Ahmed ◽  
Xu-Dong Ji
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Political Influence ◽  
Ordinary Least Squares ◽  
Accounting Conservatism ◽  
Political Connections ◽  
Board Independence ◽  
Political Connection ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between accounting conservatism, corporate governance and political connection in listed firms in Malaysia where political influence plays a significant role in the capital market and in many business dealings. Design/methodology/approach By utilizing 824 firm-year observations comprising large listed companies over a period of four years from 2004, this study uses ordinary least squares regression models to investigate the relationship between accounting conservatism, corporate governance and political connections in Malaysia. Multiple measures of conservatism developed by Basu (1997) and Khan and Watts (2009) are employed. Findings The results show evidence of accounting conservatism (bad news being recognized earlier than good news) in Malaysia. Further, the results reveal that better corporate governance structure in terms of board independence is positively associated with accounting conservatism while management ownership is negatively associated with it. However, political connection has a negative moderating effect on the positive relationship between accounting conservatism and board independence. The results also suggest political connections have a positive association with firm’s future performance. Originality/value This study is the first in investigating the effect of political connections on accounting conservatism in Malaysian context and how political connections negatively affect the monitoring role of the corporate boards. By directly measuring political connection and controlling for various corporate governance mechanisms and firm-specific attributes, this study contributes to enhance the authors’ understanding of the political influence in financial reporting quality and firm performance in an emerging market setting.

Corporate Governance and Accounting Conservatism: Evidence from the Banking Industry

2013 ◽  
Vol 21 (3) ◽  
pp. 264-286 ◽  
Author(s):  
Stergios Leventis ◽  
Panagiotis Dimitropoulos ◽  
Stephen Owusu-Ansah
Keyword(s):  
Corporate Governance ◽  
Banking Industry ◽  
Accounting Conservatism

scholarly journals Risk governance: Experience of Islamic banks

2015 ◽  
Vol 5 (2) ◽  
pp. 31-40
Author(s):  
Mat Rahim Siti Rohaya ◽  
Fauziah Mahat
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Structural Equation ◽  
Committee Member ◽  
Bank Lending ◽  
Capital Adequacy ◽  
Risk Governance ◽  
Islamic Banks ◽  
Loan Loss ◽  
Cross Sectional

Risk governance has evolved tremendously in the banking industry. Risk governance recommends the imperative roles of Chief Risk Officer (CRO) to oversee risk. This study explores risk governance influence over the Islamic banks performances. Multivariate analysis techniques measure simultaneously via Structural Equation Modelling (SEM). This study employed cross-sectional sample of 200 Islamic banks across 21 countries for the year 2014. To examine risk governance and Islamic banks performance, the study captures seventeen variables developed from risk management and corporate governance (ROA, ROE, Profit Margin, CRO, Shariah committee member, CEO, board size, remuneration meeting, credit rating, external audit, accounting standard, loan loss provision, capital adequacy ratio, total deposit ratio, GDP, central bank lending rate and inflation). The simulation result reveals, risk governance act as mediating variables towards Islamic banks performance. This study has practical and significance contribution for Islamic banks to understand risk governance, aligning with the fundamental risk management and corporate governance.

scholarly journals INFLUENCE OF AUDITOR INDEPENDENCE AND GOOD CORPORATE GOVERNANCE TOWARD ACCOUNTING CONSERVATISM IN INDONESIA

2019 ◽  
Vol 1 (1) ◽  
pp. 20-29
Author(s):  
Dovi Septiari ◽  
Wirdani Atika Sari
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Stock Exchange ◽  
Sample Selection ◽  
Financial Statements ◽  
Auditor Independence ◽  
Accounting Conservatism ◽  
Managerial Ownership ◽  
Good Corporate Governance ◽  
Internal Control System

Accounting conservatism is the precautionary principle to the profit recognition and one of the corporate governance to reduce the ability of the manager in manipulate and exaggerating the financial statements. Corporate governance is a internal control system which has its business objectives through securing company’s assets. This research is aiming to see the correlation among auditor independence and good corporate governance in accounting conservatism. Characteristics of good corporate governance in this are managerial ownership, profitability, company size and leverage. This research uses two measurements of conservatism non operating accrual and market to book ratio. This research as carried out at manufacture company in the Indonesia Stock Exchange in 2010-2014. Sample selection do by purposive sampling method and obtained 49 companies in criteria accordingly. This research used data analysis and multiple liniear regression program eviews 9. The result showed that the effect of auditor independence is not significant in accounting conservatism in indonesia. Good corporate governance influential only the size of the company and ownership. The measurement of non operating accrual and market to book ratio show different results. Further research is expected to use another proxy for other variables to measure accounting conservatism.

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