scholarly journals Key audit matters: A preliminary survey on relations with the corporate governance. An analysis in the Italian institutional setting

2019 ◽  
Author(s):  
Nicola Moscariello ◽  
Michele Pizzo ◽  
Giorgio Ricciardi ◽  
Rosa Vinciguerra
Keyword(s):  
Corporate Governance ◽  
Institutional Setting ◽  
Preliminary Survey

International Accounting Research: The Italian Context

2019 ◽  
Vol 19 (1) ◽  
pp. 73-83
Author(s):  
Giorgio Gotti ◽  
Marco Fasan
Keyword(s):  
Corporate Governance ◽  
Institutional Setting ◽  
International Accounting ◽  
Accounting Research ◽  
Societal Values ◽  
Accounting Choices ◽  
Big Picture ◽  
Italian Context ◽  
Institutional Feature ◽  
Research Studies

ABSTRACT Oftentimes, research ideas in the international accounting field arise from the comparison of different contexts and from the curiosity to understand how different constructs work in various settings. Despite knowledge and understanding of the institutional, cultural, and legal settings of countries are prerequisites for this kind of research, studies often focus on very narrow issues and do not allow a grasp of the big picture of the institutional feature of a country, and how this can influence managers' decisions related to accounting choices and disclosures. This paper aims at filling this gap and at fostering an understanding of the Italian institutional setting (e.g., culture, societal values, corporate governance, GAAPs, auditing, and tax regulations), thereby facilitating the work of international accounting researchers who wish to include Italian firms in their samples.

scholarly journals Corporate Governance Mechanisms, Ownership and Firm Value: Evidence from Listed Chinese Firms

2020 ◽  
Vol 8 (2) ◽  
pp. 20 ◽  
Author(s):  
Yusheng Kong ◽  
Takuriramunashe Famba ◽  
Grace Chituku-Dzimiro ◽  
Huaping Sun ◽  
Ophias Kurauone
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Ownership Concentration ◽  
Institutional Setting ◽  
Tobin’S Q ◽  
Governance Mechanism ◽  
Corporate Ownership ◽  
Firm Level ◽  
Tobin's Q ◽  
Negative Effect

This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin’s Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China’s stock market.

Audit committee effectiveness, audit quality and earnings management: a meta-analysis

2016 ◽  
Vol 58 (2) ◽  
pp. 179-196 ◽  
Author(s):  
Zgarni Inaam ◽  
Halioui Khamoussi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Good Governance ◽  
Meta Analysis ◽  
Negative Relationship ◽  
Real Earnings Management ◽  
Institutional Setting ◽  
Content Type

Purpose – Many researchers, in several contexts, have investigated the influence of audit committee effectiveness and audit quality variables on reducing the extent of earnings management, and empirical evidence is rather inconsistent. Design/methodology/approach – The aim of this paper is to meta-analyze the results of 58 prior studies that examined whether differences in results are related to moderating effects associated with corporate governance mechanisms or measures of earnings management. Findings – The findings show that the meta-analysis identifies many significant relationships. The independence of the audit committee, its size, expertise and the number of meetings have a negative relationship with earnings management. Similar negative relationships exist between auditor size, specialization and earnings management. Research limitations/implications – This study contributes to the corporate governance literature. Further, recognizing the function of an audit committee and audit quality shows the value of considering an institutional setting in governance research. This study is significant to academic and practitioner literatures, policy makers and professional accounting bodies as it shows that governance reforms promote companies to adopt good governance practices. The results also give useful information to investors in examining the effect of audit committee characteristics and audit quality on earnings quality. Originality/value – This study extends existing research on audit committee and audit quality to oversee both accrual and real earnings management using meta-analysis. Thus, this study has the potential to help stakeholders, board of directors, regulators and auditors, who are related with enhancing the supervision of firms and reducing the opportunities given to managers, to engage in earnings management.

scholarly journals The Influence of Government Shareholding on Dividend Policy in Malaysia

2021 ◽  
Vol 9 (3) ◽  
pp. 49
Author(s):  
Philip Sinnadurai ◽  
Ravichandran Subramaniam ◽  
Susela Devi
Keyword(s):  
Corporate Governance ◽  
Data Collection ◽  
Dividend Policy ◽  
Positive Association ◽  
Relevance Theory ◽  
Institutional Setting ◽  
Dependent Variables ◽  
Investigation Period ◽  
Independent Variable ◽  
Theory Research

We investigate the association between dividend policy and government shareholding, using Malaysian data. We hypothesize a positive association. We contribute to the literature about dividend policy. Unique features of our study include adaptations to the Malaysian institutional setting, with respect to usage of dividend relevance theory, research methodology, and data collection. The methodology entails two-stage least squares regressions. Dividend payout and dividend yield are the dependent variables in tests of the research hypothesis. The independent variable of interest measures ownership by government-related institutional investors. The sample comprises 1190 company-years, over the investigation period 2006–2013. The results support our hypothesis. The evidence suggests that this support principally emanates from companies with low-quality corporate governance.

scholarly journals Compliance with the German Corporate Governance Code: Can the heterogeneous implementation be explained?

2019 ◽  
Vol 2019 (101 (157)) ◽  
pp. 167-200
Author(s):  
Karsten Eisenschmidt ◽  
Ute Vanini
Keyword(s):  
Corporate Governance ◽  
Peer Group ◽  
Empirical Studies ◽  
Influence Factors ◽  
Family Influence ◽  
Institutional Setting ◽  
Future Research ◽  
Agency Conflicts ◽  
Corporate Governance Code ◽  
Code Compliance

Starting with the Cadbury code in 1992, various national and international Corporate Governance (CG) codes have been issued all over the world. So far, empirical studies have revealed mixed results concerning the effects and outcomes of code implementation and thus supported the hypothesis of a ‘one system does not fit all’ approach in CG. Therefore, this paper empirically analyses influence factors on compliance with the German Corporate Governance Code for a large sample of 306 listed firms in 2015. We chose German companies because of the specific institutional settings in Germany, e.g., the strong influence of founder families on a firm’s management or the relevance of debt financing. It is assumed that the country-specific institutional setting limits the transferability of results of US and UK studies. Thus, we used the German setting to derive relevant influence factors on Code compliance. In addition, we applied a more sophisticated measure of Code implementation than previous studies. Overall, we find a significant positive effect of ownership dispersion and firm size on Code compliance, whereas the other influence factors, e.g., family influence or the supervisory board’s size, reveal the right direction of impact but not the required level of statistically significance. In contrast to institutional theory, we find a negative although statistically insignificant impact of the strength of foreign investors’ influence on Code compliance. Overall, our results indicate that the institutional setting is not decisive for Code compliance. Instead, we assume that the main rationale for Code compliance is not the reduction of agency conflicts but the alignment with peer group practices as indicated by the variable company size. Future research should investigate the peer effects on the level of Code compliance in detail.

scholarly journals HOW REGULATION AFFECTS THE RELEVANCE OF BANK-DEBT MATURITY AS A CONTROL MECHANISM IN DEVELOPED COUNTRIES

2017 ◽  
Vol 18 (1) ◽  
pp. 116-130 ◽  
Author(s):  
Eleuterio VALLELADO ◽  
Paolo SAONA ◽  
Pablo SAN MARTÍN
Keyword(s):  
Corporate Governance ◽  
Control Mechanism ◽  
Common Law ◽  
Civil Law ◽  
Developed Countries ◽  
Debt Maturity ◽  
Institutional Setting ◽  
Bank Debt ◽  
Short Term ◽  
Country Level

Improvements in transparency at the country level have modified the relevance of bank debt maturity as a control mechanism. The novelty of this research is that we provide empirical evidence that the maturity of bank borrowing is contingent on the characteristics of the regulatory and the institutional setting about corporate governance. The main implication of our paper is that corporate governance rules have greater influence in civil-law countries than in common-law countries in promoting efficiency in the use of bank debt maturity. The value of this paper is that our results confirm that the implementation of similar regulations on transparency across countries with different legal systems favors the alignment of the role played by short-term bank debt in addressing asymmetric information, agency costs, and inefficient liquidation.

scholarly journals Corporate Governance, Ownership Structure and Stock Market Liquidity in Saudi Arabia: A Conceptual Research Framework

2017 ◽  
Vol 6 (4) ◽  
pp. 17
Author(s):  
Abdulaziz Mohammed Alsahlawi ◽  
Mohammed Abdullah Ammer
Keyword(s):  
Corporate Governance ◽  
Information Asymmetry ◽  
Ownership Structure ◽  
Empirical Studies ◽  
Market Liquidity ◽  
Institutional Setting ◽  
Trading Systems ◽  
Research Framework ◽  
Regulatory Policies ◽  
Conceptual Research

This paper aimed to provide a review of the literature concerning the effects of corporate governance and ownership structure on the devices of market microstructure. It provided a clear overview of empirical archival studies in literature regarding the way corporate governance and ownership structure mechanisms influence market liquidity, with focusing on the Saudi institutional setting. It aimed to pinpoint the differences and similarities in empirical outcomes of studies and determine the areas that call for further exploration. On the basis of the thorough review of literature and the theoretical basis, our study proposed a conceptual research framework. The framework is based on the premise that effective corporate governance can lead to enhanced disclosure quality, which in turn, lead to mitigating the information asymmetry and ultimately, enhanced market liquidity. Although theoretical studies argued the presence of the relationship between corporate governance, ownership and liquidity, we find that outcomes from empirical studies are still mixed. Majority of extant studies, with majority in the context of the U.S. firms, provide ambiguous results, making it challenging to reconcile the differences among them. Our paper provides important guidance for both new and experienced researchers, and it has implications for stock exchange authorities in terms of adopting effective regulatory policies and efficient trading systems to tackle information asymmetry.

scholarly journals Corporate governance of state-owned enterprises in China

2007 ◽  
Vol 5 (1) ◽  
pp. 493-499
Author(s):  
Miaojie Yu
Keyword(s):  
Corporate Governance ◽  
Profit Sharing ◽  
Institutional Setting ◽  
Advantages And Disadvantages ◽  
Corporate Governance Mechanisms ◽  
System 2 ◽  
Three Stages ◽  
Responsibility System ◽  
Managerial Responsibility ◽  
Mixed Mechanism

In the last thirty years, China has undergone three stages of corporate governance mechanisms, namely, (1) the “power-delegating and profit-sharing” system; (2) the “contracted managerial responsibility” system; and (3) the corporatization of large stateowned enterprises (SOEs). This paper will explore each mechanism, their advantages and disadvantages in detail. The main finding is that the various practices of corporate governance of SOEs are not suitable for China’s SOEs mainly due to the lack of sufficient incentive. Instead, a mixed mechanism of the “control-based” and the “marketoriented” mechanisms is more attractive given China’s unique institutional setting

scholarly journals Corporate Governance Attributes in Fraud Detterence

2019 ◽  
Vol 10 (3) ◽  
pp. 51
Author(s):  
Raziah Bi Mohamed Sadique ◽  
Aida Maria Ismail ◽  
Jamal Roudaki ◽  
Norhayati Alias ◽  
Murray B. Clark
Keyword(s):  
Corporate Governance ◽  
Cultural Values ◽  
Institutional Setting ◽  
Company Performance ◽  
Corporate Fraud ◽  
Policy Makers ◽  
Corporate Governance Mechanisms ◽  
Prior Literature ◽  
Pertinent Information ◽  
Investor Awareness

The failures of corporations such as Enron, WorldCom and HIH Insurance, to name but a few, have heightened investor awareness of the need to not only evaluate company performance, but also to consider the possibility that financial statements may not be a true reflection of company results, as fraudulent activities may have occurred during the reporting period. Since parties who are outside of the firm do not have access to pertinent information, they have to rely upon published financial and non-financial data to form an opinion regarding performance and/or the risk that fraudulent activities may have occurred. The prior literature shows a relationship between weak corporate governance and fraudulent activities, although most if not all of this research relates to Western economies. The differences in institutional setting e.g. cultural values and legal environment in Malaysia would not give the same findings with the study in western economies. Composing of many ethnicities, Malaysia is a multicultural country. With each ethnic group upholding its own culture, values and belief, businesses are conducted according to each ethnic’s culture. The results of this study could shed some light on the influence of institutional setting regarding corporate governance. Companies that were charged with accounting and auditing offences from year 2003 to 2007 were selected as the fraudulent samples. Data was collected from the years these companies were charged with fraud and the year prior to that. Logistic regression analysis was carried out to determine the significant differences between fraudulent and non-fraudulent companies with respect to corporate governance characteristics. The results indicated that the size of the board and the percentage of institutional shareholdings had significant relationships with the likelihood of corporate fraud occurrences consistently across the two-year period studied. The results of this study will assist public, corporate and accounting policy makers in formulating more effective corporate governance mechanisms.

scholarly journals The source of investment cash flow sensitivity in manufacturing firms: Is it asymmetric information or agency costs?

2016 ◽  
Vol 19 (3) ◽  
pp. 388-399 ◽  
Author(s):  
Daniel Makina ◽  
Letenah Ejigu Wale
Keyword(s):  
Corporate Governance ◽  
Asymmetric Information ◽  
South African ◽  
Cash Flow ◽  
Agency Costs ◽  
Small Firms ◽  
Manufacturing Firms ◽  
Institutional Setting ◽  
Flow Sensitivity ◽  
Cash Flow Sensitivity

In the literature, positive investment cash flow sensitivity is attributed to either asymmetric information induced financing constraints or the agency costs of free cash flow. Using data from a sample of 68 manufacturing firms listed on the South African JSE, this paper contributes to the literature by investigating the source of investment cash flow sensitivity. We have found that asymmetric information explains the positive investment cash flow sensitivity better than agency costs. Furthermore, asymmetric information has been observed to be more pronounced in low-dividend-paying firms and small firms. Despite South Africa’s having a developed financial system by international standards, small firms are seen to be financially constrained. We attribute the absence of investment cash flow sensitivity due to agency costs to good corporate governance of South African listed firms. Thus the paper provides further evidence in support of the proposition in the literature that the source of investment cash flow sensitivity may depend on the institutional setting of a country, such as its corporate governance.

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