Effects of Corporate Governance and Board Equity Ownership on Earnings Quality

2006 ◽  
Author(s):  
Teresa M. Pergola ◽  
Gilbert W. Joseph ◽  
Ali Jenzarli
Keyword(s):  
Corporate Governance ◽  
Earnings Quality ◽  
Equity Ownership

How firms' performance mediates the relationship between corporate governance quality and earnings quality?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammed Adel Elzahaby
Keyword(s):  
Corporate Governance ◽  
Analytical Model ◽  
Performance Measures ◽  
Earnings Quality ◽  
Direct Path ◽  
Content Type ◽  
Indirect Path ◽  
Governance Quality ◽  
Financial Performance Measures ◽  
Corporate Governance Quality

PurposeThe purpose of this study is to propose an analytical model that investigates both a direct path between corporate governance quality and earnings quality and an indirect path, in which firms' performance is a mediating variable that is influenced by corporate governance quality and that, in turn, influences earnings quality.Design/methodology/approachThe study employs a structural equation modelling (SEM), to a sample of Egyptian listed firms during 2011–2017, to test the proposed analytical model and to determine the relative importance of both the direct and indirect paths.FindingsThe findings show a statistically significant evidence of both a direct path from corporate governance quality to earnings quality, and an indirect path that is mediated by firms' performance, suggesting that both corporate governance quality and performance have a complementary effect on earnings quality. However, the weight of the evidence favouring the direct path is more important in case of accounting-based performance measures; and the weight of the evidence favouring the indirect path is more important in case of market-based performance measures.Research limitations/implicationsThe current study has some limitations. First, the study focuses specifically on one proxy for measuring earnings quality which is the absolute value of discretionary accruals. Other proxies of earnings quality could be examined in future research, such as income smoothing, earnings persistence and timely loss recognition. Another limitation is that only financial performance measures were examined, namely, return on assets, return on equity, price-to-earnings ratio and market-to-book value. Notwithstanding, non-financial performance measures could be investigated in future studies, such as balanced scorecard (BSC). Furthermore, considering cultural, political and legislative differences among countries, the results may not be generalised outside the scope of the current sample (i.e. Egyptian listed firms).Practical implicationsThe implications of the findings for both theory and practice are discussed.Originality/valueThis study is distinguished by validating an analytical model that has been overlooked by prior studies. Moreover, it provides a new constructed index for measuring corporate governance quality. Furthermore, it uses a new sophisticated statistical technique, which is SEM, for testing the proposed model.

scholarly journals An Interpretive Structural Model of Barriers in Implementing Corporate Governance (CG) in Pakistan

2019 ◽  
Vol IV (I) ◽  
pp. 359-375
Author(s):  
Abdul Aziz Khan Niazi ◽  
Tehmina Fiaz Qazi ◽  
Abdul Basit
Keyword(s):  
Corporate Governance ◽  
Data Collection ◽  
Literature Review ◽  
Structural Model ◽  
Minority Shareholders ◽  
Micmac Analysis ◽  
Modeling Methodology ◽  
Equity Ownership ◽  
Key Barrier ◽  
Interpretive Structural Model

The purpose of this study is to structure a model of relationships among barriers in the implementation of CG in Pakistan. It also points out a key barrier in embarking on the regime of CG. The design of research consists of a literature review, data collection and analyses. Modeling methodology entails ISM coupled with MICMAC. Findings revealed that “lack of investigation about the rights of minority shareholders” is the most critical barrier since this occupies the bottom of the model. Whereas, barriers namely “basic shareholders rights are not often protected, minority shareholders rights are often violated, lack of autonomy on the part of the auditors and rules requiring equity ownership disclosure are not followed” are least critical since they occupy the top of the model. MICMAC analysis revealed that three barriers fall in the independent quadrant, six in the linkage, six independent and two in autonomous. This study is helpful to regulators and corporations to successfully embark on the regime of CG.

scholarly journals The relationship between earnings quality, control mechanisms of corporate governance, and future stock price returns. The case of the Netherlands

2013 ◽  
Vol 10 (4) ◽  
pp. 379-389
Author(s):  
Elisabetta Basilico ◽  
Hugh Grove
Keyword(s):  
Corporate Governance ◽  
The Netherlands ◽  
Stock Price ◽  
Earnings Quality ◽  
Audit Committees ◽  
Control Mechanisms ◽  
Public Companies ◽  
Corporate Governance Mechanisms ◽  
New Research ◽  
The Relationship

This article extends prior research on the relation between earnings quality (assessed by accruals) and future stock price returns and adds new research on the relationships between direct and indirect corporate governance mechanisms of control with accruals and future stock price returns. We study public companies of the Netherlands and find the presence of mispricing associated with very high and very low accruals. We also find evidence that direct corporate governance control mechanisms, such as the existence of separate, independent, and skilled audit committees, are related to higher earnings quality and higher future stock price returns.

The Impact Of Corporate Governance Mechanisms On Earnings Quality: Evidence From Egypt

2015 ◽  
Vol 2 (1) ◽  
pp. 69-108
Author(s):  
صلاح عبدالحفیظ مصطفى على ◽  
عبدالمحسن محمد الدسوقی
Keyword(s):  
Corporate Governance ◽  
Earnings Quality ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
The Impact ◽  
Quality Evidence

Audit Committee Characteristics and Earnings Quality

2020 ◽  
pp. 23-49
Author(s):  
Fatima Albedal ◽  
Allam Mohammed Hamdan ◽  
Qasim Zureigat
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Earnings Quality ◽  
Listed Companies ◽  
Independent Variables ◽  
Pooled Data ◽  
Data Regression ◽  
Code Of Corporate Governance ◽  
The Relationship

This chapter investigates the relationship between the audit committee and earnings quality of listed companies in Bahrain Bourse and to examine whether those companies comply with the obligatory code of corporate governance. The sample of this study includes 40 companies listed in Bahrain Bourse for the period 2013-2017. The model of the study tested the relationship between the independent variables of audit committee characteristics and the dependent variable of earnings quality using pooled data regression. The findings of the study showed that the Bahraini listed companies comply and follow the code of corporate governance and some audit committee characteristics have an impact on earnings quality.

Short-sale refinancing and earnings response coefficient: evidence from China

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tingli Liu ◽  
Ying Jiang ◽  
Lizhong Hao
Keyword(s):  
Corporate Governance ◽  
Property Rights ◽  
Emerging Market ◽  
Earnings Quality ◽  
Sample Selection ◽  
Short Selling ◽  
Content Type ◽  
Short Sale ◽  
Earnings Response ◽  
The Impact

Purpose Although short selling has been legalized in China for nearly 10 years, due to the existence of short-sale constraints, its impact on corporate governance of listed companies remains unclear. This paper aims to examine the impact of short-sale refinancing on earnings quality after the short-selling constraints have been released. The authors further explore whether this impact is subject to the nature of property rights and shareholding structures. Design/methodology/approach This study is based on a sample of A-share firms in China for the period 2014–2016. The authors use earnings response coefficients (ERC) as a proxy for earnings quality. To empirically examine this issue, a matching sample is generated by using propensity score matching method (PSM) to reduce sample selection bias. Findings This study provides evidence that deregulation of short selling has positive external effect on corporate governance. The results indicate that the potential short-selling opportunities can effectively suppress earnings manipulation and improve earnings quality. However, the impact of short selling on earnings quality varies for companies with different nature of property rights and shareholding structure. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the relationship between short selling and earnings quality in the unique setting of short-sale refinancing. This study provides new evidence on the impact of short selling at the micro level and calls for further deregulation of short selling. In addition, this study contributes to existing studies on short-sale refinancing by examining an emerging market.

scholarly journals Effect of corporate governance board leadership models and attributes on earnings quality of quoted nigerian companies

2019 ◽  
Vol 6 (1) ◽  
pp. 1683124 ◽  
Author(s):  
Cosmas Ikechukwu Asogwa ◽  
Grace Nyereugwu Ofoegbu ◽  
Judith Ima Nnam ◽  
Onyekachi David Chukwunwike
Keyword(s):  
Corporate Governance ◽  
Earnings Quality ◽  
Leadership Models ◽  
Board Leadership
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