Busy audit committee directors and corporate narrative disclosure in Oman

Lawati, Hidaya Al; Hussainey, Khaled; Sagitova, Roza

doi:10.1108/raf-11-2022-0326

Cited by 4 publications

(3 citation statements)

References 105 publications

(189 reference statements)

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“…As stressed by Alhababsah (2019), when the majority of stockholders own a certain percentage of a company's stock, this is referred to as ownership concentration. Furthermore, Al Lawati et al (2023) found a positive correlation between overlapped audit committee directors who own 5% of the corporation's shares and financial reporting quality.…”

Section: Block Holders' Ownershipmentioning

confidence: 98%

Ownership Concentration and Audit Actions

Al Lawati,

Sanad

2023

Administrative Sciences

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This study presents current evidence on the impact of different corporate ownership types on audit quality in Oman and potentially in other developing countries with similar institutional environments, such as GCC countries. While previous research has primarily focused on overall ownership concentration, this study aims to examine the role of specific shareholder identities and their influence on the demand for audit quality. This research sheds light on the relationship between ownership identities and audit quality of Omani financial companies listed on the Muscat Stock Exchange from 2014 to 2020. This study employs additional analysis to mitigate potential confounding factors and ensure robust results. Additionally, a GMM test establishes the robustness of our findings, alleviating potential endogeneity concerns. The findings highlight the positive impact and significance of bank, government, and foreign ownership in promoting high audit quality. In contrast, ownership by financial institutions (non-banks) and block holder concentrations negatively and significantly impact audit quality. In addition, this study found that family members on boards play positive moderating roles in the relationship between ownership concentration and audit quality. In addition to contributing to the existing literature, this study provides valuable insights for regulatory bodies to consider the role of ownership types in their decision-making processes. Our findings also assist investors in making informed choices and offer a better understanding of how ownership structures influence audit quality for other stakeholders. The implications of this research extend beyond Oman and can be relevant to countries with similar ownership structures and regulatory frameworks.

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Section: Block Holders' Ownershipmentioning

confidence: 98%

Ownership Concentration and Audit Actions

Al Lawati,

Sanad

2023

Administrative Sciences

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“…Some previous research has also mentioned a busy internal component inside companies, like an audit committee, which will be reflected in the lowest quality of financial disclosure (Al Lawati et al , 2023; Kusnadi et al , 2016) and higher key audit matter disclosure by the auditor (Al Lawati and Hussainey, 2022). This means that busyness is a behavior that can bring potential risks to the company.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Busy CEOs and audit fees: evidence from Indonesia

Harymawan,

Putri,

Ratri

et al. 2023

ARJ

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Purpose A company needs to use auditing procedures to ensure the reliability of financial statements while also providing transparency to stakeholders. The extent of risk associated with the company depends on the directors’ involvement in its daily operations. This paper aims to study the relationship between busy chief executive officers (CEOs) and audit fees. Design/methodology/approach This study uses 1,037 data samples from companies listed on the Indonesia Stock Exchange from 2010 until 2018. It adopts the ordinary least squares method to test the hypothesis. Furthermore, this study performs robustness tests, such as propensity score matching (PSM) and Heckman’s two-stage least square tests (Heckman, 1979), to address the endogeneity issues. Findings This study finds that the appearance of a busy CEO in a company will significantly increase the audit fee. It also concludes that a long tenure of a busy CEO will substantially weaken the positive relationship between the CEO and the audit fee. However, this study discovers that, in a company with a busy CEO, a monitoring mechanism through the independent commissioner and risk management committee will only help to maximize the firm’s practical risk evaluation a little. This result is robust because the PSM and Heckman tests display consistent results, so it is free from endogeneity issues. Practical implications This study is valuable for theoretical and practical development in Indonesia. Due to the minimum regulation about multiple positions on boards in Indonesia, the shareholders must be aware of the need to choose a board with more skill and commitment to improve the position of the company. This result also warns the C-level of the company to pay more attention to its risk-monitoring process to make it more effective and efficient. Originality/value Indonesia is one of the countries that have implemented the two-tier governance system. With the minimum regulation about multiple directorships in Indonesia, this study offers new insights into how a busy CEO will be related to the audit outcomes.

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“…Since investors and other outsiders place a higher value on a company's forward-looking projections than on its historical performance, thus it makes sense that they would find forward-looking disclosure more useful. As a result of its importance, researchers in recent years have been motivated to focus their studies on FLID (e.g., Buertey and Pae, 2020;Dey et al, 2020;Firmansyah and Irwanto, 2020;Rifai and Siregar, 2021;Abdelazim et al, 2022;Effah et al, 2022;Al Lawati and Hussainey, 2022;Al Lawati et al, 2023a;Al Lawati et al 2023b). Malaysian regulatory authorities have been striving to improve disclosure practices as indicated by the corporate disclosure framework established under the Bursa Malaysia Listing Requirement ( 2004), which contained the Best Practices in Corporate Disclosure initiative.…”

Section: Introductionmentioning

confidence: 99%

Exploring Forward-Looking Information Disclosure Practices: Insights from the Malaysian Landscape in the IFRS Era

Muftah,

Zainuddin

2024

IJARBSS

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The current study seeks to comprehensively explore Forward-Looking Information Disclosure (FLID) practices in Malaysian firms' annual report narratives. Using a dataset spanning nine years and comprising 1971 firm-year observations, the current study employs visual and statistical analyses to examine the trends and practices of FLID across various industries and the partitioned periods of pre, during and post-IFRS mandatory adoption. The analysis indicates a notable increase in various FLID proxies among Malaysian companies. FLID topics, excluding employee FLID, show steady increases, with a significant surge in 2016 and 2017. Operational FLID is consistently disclosed at higher levels with variations across sample years while accounting and employee FLID topics exhibit the lowest disclosure levels. The Health Care industry leads in FLID, followed by the Utilities industry, whereas Industrial Products and Property industries demonstrate the lowest levels. The RM-ANOVA test highlights significant differences in FLID measures and topics across the three IFRS periods, but no significant differences in mean values for employee FLID. These findings hold potential implications for managers, investors, and policymakers, as they can aid in improving information quality and promoting greater transparency in annual report narratives in the Malaysian context.

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Busy audit committee directors and corporate narrative disclosure in Oman

Cited by 4 publications

References 105 publications

Ownership Concentration and Audit Actions

Ownership Concentration and Audit Actions

Busy CEOs and audit fees: evidence from Indonesia

Exploring Forward-Looking Information Disclosure Practices: Insights from the Malaysian Landscape in the IFRS Era

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