A test of audit committee characteristics and free cash flows

Benjamin, Samuel Jebaraj; Karrahemi, Kiarash Ehtiat

doi:10.22495/cocv10i2c3art4

Cited by 10 publications

(6 citation statements)

References 56 publications

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“…In this regard, the present study summarizes two main differences related to it: (i) the impact of urban planning development is analyzed in the evolution of the increase of land value, motivated solely by its development over time, until it is fully urbanized, which does not consider the subsequent increase when the land is built on, produced by the movements that occur in the real estate market; (ii) a specific method of land valuation is established and specified, which is the discount model of the FCF, considering the virtual real estate investment project to be developed on the land to be valued. Effectively, this method is one of the most widely used internationally for the evaluation of investment projects [42][43][44][45][46][47]. The discount rate considered was the WACC (after taxes).…”

Section: Discussionmentioning

confidence: 99%

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Land Valuation Sustainable Model of Urban Planning Development: A Case Study in Badajoz, Spain

et al. 2018

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Abstract:The urban planning development process in urban territories has multiple consequences, not only in spatial structure but also in land valuation patterns. The economic value of land encompassed in municipal planning-which is associated with a certain urbanized use-increases as the planning processes evolve over these lands. For economic land valuation to comply with the required parameters of urban and territorial sustainable development, it is pivotal that in the determination of land value there are no expectations of difficult or impossible realizations, in order to eliminate any speculative element from the valuation. The land valuation model presented in the current study complies with this premise, proposing a sustainable land valuation model based on the evolution of urban planning development, achieving maximum value when it is fully urbanized. The main objective of the present work is to analyze how land value increases as municipal planning develops and to suggest a sustainable valuation model for land with urban use. Contextually, through a case study analysis, the development of municipal planning has been divided over time into four urban states: (i) land without detailed planning; (ii) land with detailed planning; (iii) land with re-parceling; and (iv) urbanized land. In this regard, the gradual evolution of land value which has reached different states over time has been determined, as has scenarios where the value has increased up to the value of urbanized land.

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Section: Discussionmentioning

confidence: 99%

“…The FCF discount model is one of the most widely used internationally to value investment projects [42][43][44][45][46][47]. FCF represents the excess liquidity or the money that remains available to attend, on the one hand, the sharing of profits among the investors and on the other, the payment of the debt to the creditors.…”

Section: Methodology Fundamentalsmentioning

confidence: 99%

Land Valuation Sustainable Model of Urban Planning Development: A Case Study in Badajoz, Spain

et al. 2018

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“…It assists in ensuring the best leverage ratio as a control system. According to Benjamin and Karrahemi (2013), having more committee members means that more people are being watched over and monitored.…”

Section: Audit Committee Size and Financial Leveragementioning

confidence: 99%

Does the Relationship between Board Gender Diversity, other Effective Board Characteristics, and Audit Quality Traits affect the 2Fs: Financial Performance and Financial Structure? “Evidence from Egypt”

صبحي عبد المجيد عبد

2023

مجلة المحاسبة والمراجعه لاتحاد الجامعات العربيه

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The purpose of this study is to examine the impact of board gender diversity with effective corporate governance practices related to board characteristics and audit quality characteristics (namely, big 4 audit firms, independent audit committees, frequent audit committee meetings, and audit committee size) on both the financial performance and structure of listed Egyptian companies. Accounting-based measures such as leverage ratio, return on assets, and current ratio were used to evaluate financial structure decisions and financial performance, respectively, as well as board independence, board size, independence of the audit committee, CEO duality, Big 4 and firm size, and Tobin's Q as control variables. Secondary data obtained from annual financial statements, board of directors' reports, and corporate governance reports was used in the study. The study sample included 56 non-financial companies listed on the 100 ESG index for an eight-year period, 2015 to 2022. Regression employing panel data is used to analyze the data. The findings of this study demonstrate a significant correlation between corporate performance and the size, independence, CEO dualism, and gender diversity of the board. Results reveal a positive association between board gender diversity and company performance, as the presence of female directors on the board is significantly linked to improved firm performance, and that firm size adversely moderates that relationship, suggesting that smaller businesses are most likely to benefit from board gender diversity. The findings indicate that board size has a significant impact on the capital structure decision-making process because the qualities of the board of directors play a significant role in determining a firm's capital structure. Additionally, the results show an insignificant correlation between board size and company performance. In addition, financial performance dramatically improves when the number of independent, non-standing directors rises. The results also demonstrate a positive correlation between audit committee meeting frequency and financial success, with higher audit committee meeting frequency resulting in better financial performance. The findings of this study can assist management and the board in making informed choices regarding the composition of audit committees and other corporate Dr. Nevine Sobhy Abdel Megeid Does the Relationship between Board Gender 5 ‫العربية‬ ‫الجامعات‬ ‫التحاد‬ ‫اجعة‬ ‫المر‬ ‫و‬ ‫المحاسبة‬ ‫مجلة‬ ‫ا‬ ‫الثالث‬ ‫لعدد‬ 2023governance practices that are related to board characteristics in order to enhance business performance and financial health. The independence and size of the board of directors will permit the audit committee members to carry out their supervisory duties in an appropriate manner. According to the findings, the audit committee's external members can reduce managers' opportunistic behavior, improve performance, and improve the company's quality and transparency of information by reducing information fraud.

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“…The audit committee is used to supervise the performance of managers and their decisionmaking process in order to reduce agency conflict as an internal governance mechanism (Fama & Jensen, 1983). It helps to ensure the best leverage ratio as a system of control since a greater number of committee members reflects more monitoring and overseeing individuals (Benjamin & Karrahemi, 2013). According to the Cadbury report that there should be a minimum of three members and these members should be confined to the non-executive's directors of the company (Cadbury Report, 1992).…”

Section: Concept Of Audit Committee Sizementioning

confidence: 99%

“…It helps to ensure the best leverage ratio as a system of control. Since a greater number of committee members reflects more monitoring and overseeing of other individuals (Benjamin & Karrahemi, 2013). Obradovich and Gill (2013) studied the impact of audit committee size and financial leverage.…”

Section: Audit Committee Size and Leveragementioning

confidence: 99%

The Impact of Audit Committee Structure on Capital Structure: A Case of Omani Listed Companies

Younas

Kassim

2022

ijbass

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Financial scandals have diverted the attention of investors, shareholders, lenders, and different stakeholders toward the corporate governance mechanism. Under the corporate governance system, the conflicts between different stakeholders are managed and controlled. Several variables work as proxies of corporate governance systems. The audit committee structure is an important tool to mitigate the adverse effects of agency problems. This study focuses on the impact of audit committee characteristics on the capital structure. The main purpose of this study is to examine the relationship between audit committee effectiveness and the leverage of the firms. Three proxies of audit committee (AC) structure are used such as AC meeting frequency, AC size, and AC independence, whereas leverage ratio is used to reflect capital structure. The study is conducted on the listed companies in the Sultanate of Oman for the period 2016 to 2019. The result of the study shows a significant negative relationship between AC meeting frequency and AC size with leverage. Whereas AC independence does not show any association with leverage in the case of Omani-listed firms. The result confirms the agency theory notion that the corporate governance system is an effective tool to balance the interest of different stakeholders and control the leverage of the firm. This study provides valuable findings to regulatory bodies and decision-makers to keep the balance capital structure through an effective audit committee structure.

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A test of audit committee characteristics and free cash flows

Cited by 10 publications

References 56 publications

Land Valuation Sustainable Model of Urban Planning Development: A Case Study in Badajoz, Spain

Land Valuation Sustainable Model of Urban Planning Development: A Case Study in Badajoz, Spain

Does the Relationship between Board Gender Diversity, other Effective Board Characteristics, and Audit Quality Traits affect the 2Fs: Financial Performance and Financial Structure? “Evidence from Egypt”

The Impact of Audit Committee Structure on Capital Structure: A Case of Omani Listed Companies

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