Board Audit Committee Characteristics and Financial Performance of Selected Commercial Banks in Ghana

Baiden, John N. E.

doi:10.5296/ijafr.v10i1.16749

Cited by 3 publications

(2 citation statements)

References 2 publications

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“…Likewise, Xie et al (2003) reported that small ACs tend to be more participatory, since they are characterized by a higher oversight capacity than larger ACs. Furthermore, Indrawan et al (2018) and Baiden (2020) revealed that a company with a smaller AC size tended to improve income smoothing practices due to lower supervision in the financial reporting process. On the contrary, the larger the AC size, the smaller the practice of income smoothing.…”

Section: Audit Committee Sizementioning

confidence: 99%

Impact of Audit Committee Quality on the Financial Performance of Conventional and Islamic Banks

Haddad

Ammari

Bouri

2021

JRFM

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A lot of previous research studied the relationship between audit committee quality and the financial performance of conventional banks before and during the subprime crisis, whereas some other investigations analyzed the same association in the framework of Islamic banks. However, no study has compared these two correlations either before, during, or after the subprime crisis. Several reasons explain the differences, such as the audit committee quality of each bank type, the evaluation method of the financial performance, the research peculiarities, the methodology, the data, and the interpretation. This research aims to compare the impacts of the audit committees’ quality on the financial performance of Islamic and conventional banks between 2010 and 2019. The financial performance measures and audit committees’ determinants of the conventional and Islamic banks concerned 112 banks of each type. The collected data covered four continents: America, Asia, Africa, and Europe. Impacts were compared by using the Generalized Least Squares analysis. The results showed that the audit committee reduced the profitability of two bank types. Moreover, it harmed the conventional banks’ efficiency but reported an unclear effect within Islamic banks. Even so, we noticed that the audit committee had a positive impact on the conventional banks’ liquidity, while the same effect was apparently ambiguous for the Islamic banks’ liquidity. For solvency, the audit committee positively influenced conventional banks while it affected that of Islamic banks.

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Section: Audit Committee Sizementioning

confidence: 99%

Impact of Audit Committee Quality on the Financial Performance of Conventional and Islamic Banks

Haddad

Ammari

Bouri

2021

JRFM

View full text Add to dashboard Cite

show abstract

“…Likewise, Xie et al (2003) reported that small ACs tend to be more participatory, since they are characterized by a higher oversight capacity than larger ACs. Furthermore, Indrawan et al (2018) and Baiden (2020) revealed that a company with a smaller AC size tended to improved income smoothing practices due to lower supervision in the financial reporting process.…”

Section: Audit Committee Sizementioning

confidence: 99%

The effect of audit committee quality on the conventional and Islamic banks' financial performance between subprime and Corona crises

Haddad

Ammari

Bouri

2021

AJAR

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PurposeThis study aims to test empirically the differences between Islamic and conventional banks in terms of impacts of the audit committees' quality on financial performance between Subprime and Corona crises.Design/methodology/approachThe variables are articulated in four hypotheses tested by the GLS analysis. The data were collected via DATASTREAM and from banks' annual reports. The collected data covered four continents: America, Asia, Africa and Europe. The financial performance measures and audit committee's determinants of the conventional and Islamic banks concerned 112 banks of each type after the Subprime crisis and before the Corona crisis (2010–2019).FindingsResults showed that the audit committee reduced the profitability of two bank types. Moreover, it harmed the conventional banks' efficiency, but reported an unclear effect within Islamic banks. Even so, the authors noticed that the audit committee had a positive impact for the conventional banks' liquidity, while the same effect was apparently ambiguous on the Islamic banks' liquidity. For solvency, the audit committee positively influenced conventional banks, while it affected that of Islamic banks.Research limitations/implicationsEmpirically, the authors’ results can serve as a reference for decision-makers allowing to clarify the data on the financial competitiveness of two bank types to facilitate the planning of strategic performance programs based on the audit committee quality. Theoretically, researchers found that the differences between the results are due to the audit committee quality of each bank type or to the financial performance evaluation method. However, there are further factors that are related to the research peculiarities, the methodology, the data and the interpretation.Originality/valueBased on the comparative literature review between conventional and Islamic banks, this study is the first conditional and comparative research between the audit committee quality and the financial performance of conventional and Islamic banks in a specific period (after Subprime and before Corona crises).

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How to improve the financial performance of Islamic banks in the MENA region? A Shariah governance perspective

Kateb,

Nafti,

Zeddini

2023

IJOEM

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PurposeThe purpose of this study is to investigate the impact of Shariah Advisory Board (SAB), Audit committee (AC) and board of directors (BD) characteristics on the performance of Islamic banks (IBs) in the MENA region.Design/methodology/approachThe paper employs a quantitative approach, utilizing both ordinary least squares (OLS) regression and panel data analysis (random effects models) to examine the relationship between corporate governance variables and the performance of IBs. The sample consists of 50 IBs from 10 countries, spanning a seven-year period (2010–2016), with the exclusion of the Covid-19 pandemic period. To ensure the robustness of the results, various sensitivity tests were conducted, including pooled regression OLS and subsample analysis based on adhering to the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards.FindingsThe study's findings suggest that the size of the SAB and the membership of at least one member of the SAB on the AAOIFI have a notable adverse effect on the performance of IBs. On the other hand, the AC independence has a positive influence on bank performance. However, there was no significant impact observed for AC size, meeting frequency and BD characteristics on bank performance. The research also revealed nuanced relationships between governance variables and bank performance when analyzing the sample based on AAOIFI adoption. Among banks not adhering to AAOIFI standards, SAB size and CEO duality negatively affected return on assets, while AC independence positively impacted it. For AAOIFI-compliant banks, AC independence significantly improved bank performance, whereas AC meetings exhibited a negative effect. Furthermore, there were no significant relationships observed for return on equity among banks not adhering to AAOIFI standards, whereas AAOIFI-compliant banks experienced positive impacts from AC independence. These results offer valuable insights into the intricate connection between governance attributes and bank performance, particularly in the context of AAOIFI standards adoption.Practical implicationsThe study's findings have important practical implications for various stakeholders in the Islamic banking industry. For bank practitioners and management, the study highlights the significance of enhancing the independence of AC to improve decision-making and risk management, leading to better bank performance. Moreover, careful selection of SAB members can mitigate potential negative effects on performance. Policymakers may consider promoting AAOIFI standards to shape the relationship between governance and bank performance. Investors can use the insights to make informed decisions, and banks with stronger governance may attract more investments.Originality/valueThrough quantitative analysis and AAOIFI-based sample division, this study adds to the growing literature on corporate governance and the performance of IBs by examining the impact of multiple corporate governance variables on the performance of IBs in the MENA region. To provide a theoretical basis for this relationship, three theories, namely agency, stewardship and stakeholder theories, are employed and discussed.

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Board Audit Committee Characteristics and Financial Performance of Selected Commercial Banks in Ghana

Cited by 3 publications

References 2 publications

Impact of Audit Committee Quality on the Financial Performance of Conventional and Islamic Banks

Impact of Audit Committee Quality on the Financial Performance of Conventional and Islamic Banks

The effect of audit committee quality on the conventional and Islamic banks' financial performance between subprime and Corona crises

How to improve the financial performance of Islamic banks in the MENA region? A Shariah governance perspective

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