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This study aims to explore the impact of audit characteristics and gender diversity on firm performance across family and non-family firms in Bangladesh. Using data of 61 non-family and 48 family firms from 2013 to 2019, this study applies system generalised method of moments approach to carry out regression analysis. Next, the consistency of results is detected by a full sample interaction analysis. In case of non-family firm, this study documents that Big4 audit firms (Big4) and female directors on board (FDR) have significant positive impact on firm performance. Conversely, audit meeting frequency (AMF) contributes negatively to the firm performance. Unfortunately, audit committee size (ACS) and audit committee independence (ACI) have no significant contribution on firm performance. In case of family firms, this study finds that ACS and ACI have significant negative impact on firm performance. Besides, Big4, AMF and FDR have no significant contribution on firm performance. It reflects that corporate governance mechanisms in family firm are not working well and even to some extent detrimental to the firm performance. It, ultimately, demands for reforms in corporate governance framework and incorporating new dimensions for family firms.

Purpose This study aims to investigate the earnings management practices of the listed manufacturing firms in Bangladesh and assess the impact of corporate governance mechanisms on such earnings management behavior. Design/methodology/approach The study applies the real earnings management (REM) model developed by Dechow et al. (1998) and implemented by Roychowdhury (2006) and modified Jones model (1991) for the proxy of accrual-based earnings management (AEM). It uses a pooled ordinary least square regression model corrected with robust standard errors for empirical analysis. Findings The study finds that firms with small positive earnings per share are engaged in AEM to avoid losses. Also, firm managers craft discretionary expenses to manage real earnings. For governance factors, the institutional shareholders tend to play a significant role in limiting both REM and AEM embedded in generally accepted accounting principles or International Financial Reporting Standards. Also, factors such as foreign ownership and board size significantly restrict REM, whereas director ownership encourages the same. The paper does not reveal any significant monitoring role for other governance factors in curbing either REM or AEM practices by Bangladeshi firms. Research limitations/implications The paper studies the monitoring role of governance mechanisms on listed manufacturing firms’ earnings management. A study of separating the listed firms into family and non-family ones could be interesting for future research. Practical implications The paper unveils earning management techniques used by firms in Bangladesh and provides critical policy implications to the corporate governance mechanisms that effectively limit earnings management practice. Social implications The social significance is to aware constituents of financial reporting about the earnings management behavior by firms in emerging economies. Originality/value The study adds to evidence that the manufacturing firms in Bangladesh adopt both REM and AEM techniques to avoid losses. Simultaneously, the paper highlights some critical governance factors that can restrict misleading earnings management behavior by firms in an emerging economy to assist in policymaking.

Article History

This study attempts to explore how working capital decision, that is, aggressive investment and finance decision and efficiency of the working capital management (WCM) contribute to the profitability operationalised by gross operating profit (GOP) and return on assets of listed manufacturing firms in Bangladesh. To investigate this relationship, the study has taken into consideration of 468 sample observations from 108 listed firms covering the year from 2013 to 2017. This study finds that aggressive investment and finance decision significantly contribute to the profitability of the firm. Besides, the efficiency of WCM has significant impact on the profitability. In addition, the constructs of efficiency of WCM—that is, days in inventory outstanding, days in sales outstanding—has significant negative impact on the profitability of the firm. Unfortunately, this study finds no significant impact of days in payables outstanding on firm’s profitability.