Cross-country evidence on the importance of Big Four auditors to equity pricing: The mediating role of legal institutions

El Ghoul, Sadok; Guedhami, Omrane; Pittman, Jeffrey

doi:10.1016/j.aos.2016.03.002

Cited by 80 publications

(17 citation statements)

References 104 publications

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“…Furthermore, our perception that the reputation of external auditor type will significantly relate to the extent of environmental disclosure by Nigerian companies was not supported by the regression result. The finding agrees with the views El Ghoul et al (2016); Ernstberger & Grüning (2013). This study contributes to extending the existing literature on environmental disclosure in Nigeria by providing insights on the influence of corporate governance on the degree of environmental disclosure of non-financial firms listed on Nigeria Stock Exchange.…”

Section: Resultssupporting

confidence: 87%

“…From the point of ethical values, Houqe et al (2015) stated thus entities "from countries where 'high corporate ethical values' prevail are more likely to hire a Big four auditor". By extension, we expect "Big 4" auditor type to influence extensive corporate environmental disclosure in a secure legal environment, investors protection and disclosure standards (El Ghoul et al, 2016;Ernstberger & Grüning, 2013).…”

Section: Introductionmentioning

confidence: 99%

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The Influence of Corporate Governance on Environmental Disclosure of Listed Non-Financial Firms in Nigeria

Odoemelam

Okafor

2018

IJSAM

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The study investigates the influence of corporate governance on environmental disclosure of non-financial firms listed in Nigeria Stock Exchange (NSE), anchoring on “trinity theory” (agency, stakeholder and legitimacy theories). 86 firm-year observations across 86 companies listed in Nigeria Stock Exchange (NSE) using content analysis, cross-sectional data, OLS regression techniques were used to analyze the influence of board characteristics on the extent of overall environmental disclosure (OED). The results show that board independence, board meeting and the environmental committee were statistically significant while audit committee independence and board size were insignificant. Among the three company attributes used to mitigate spurious result only Firm size significantly influence the quantity of overall environmental disclosure of the sample companies. Auditor type “big 4” (Ernest Young, Deloitte, KPMG and PWC) and industry membership show insignificant relation to environmental disclosure. The findings indicate that the level of environmental disclosure of nonfinancial companies in Nigeria is quite insufficient at an average of 10.5 %. It is not surprising that environmentally sensitive industry and auditor type had no significant influence on the extent of environmental disclosure. This buttress the point that the environment the companies operate is institutionally and legally weak. Hence it calls for improvement on environmental law and implementation as well as harmonized environmental reporting infrastructure and standard to aid comparison.

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Section: Resultssupporting

confidence: 87%

Section: Introductionmentioning

confidence: 99%

The Influence of Corporate Governance on Environmental Disclosure of Listed Non-Financial Firms in Nigeria

Odoemelam

Okafor

2018

IJSAM

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“…We define the countries of sample firms by the headquarter country (LOC code in Compustat). As indicated by Francis and Wang (2008), Ghoul et al (2016) and Ramanna and Sletten (2014), country-fixed effects are powerful in controlling for country-wide characteristics. Ai and Norton (2003) and Powers (2005) present that coefficients on interaction terms in nonlinear models are misinterpreted by conventional methods.…”

Section: T a B L E 8 Robustness Testsmentioning

confidence: 99%

Does the Form 20‐F reconciliation help ensure the financial reporting quality of cross‐listed IFRS firms? A comparison with cross‐listed non‐IFRS firms

et al. 2021

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This paper investigates whether financial reporting quality improves or deteriorates after the US Securities and Exchange Commission (SEC) decided to eliminate the Form 20‐F reconciliation requirement for foreign cross‐listed firms following International Financial Reporting Standards (IFRS). Using a difference‐in‐differences research design, we find that cross‐listed IFRS firms are less likely to restate financial statements after the SEC revoked their reconciliation requirement, as compared to cross‐listed non‐IFRS firms that still need to prepare the reconciliation. Moreover, such a reduction in the occurrence of financial restatements is more prominent when cross‐listed IFRS firms engage global industry‐specialist auditors and originate from common law countries. Together, this paper lends support to the elimination of the reconciliation requirement for cross‐listed IFRS firms and highlights the important roles of auditors and the legal environment in shaping financial reporting quality.

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“…From the point of ethical values, Houqe et al, (2015) stated thus entities "from countries where 'high corporate moral values' prevail are more likely to hire a Big four auditor." By extension, we expect "Big 4" auditor type to influence extensive corporate environmental disclosure in a strong legal environment, investor protection and disclosure standards (El Ghoul et al, 2016;Ernstberger & Grüning, 2013).…”

Section: Audit Firm Sizementioning

confidence: 99%

“…Whereas the South Africa sample (having a lower percentage of environmentally polluting industries) points to legitimacy and reporting perspectives suggests a significant positive relationship. Prior empirical research on audit firm size influence on environmental disclosure provides mixed results on both the existence and direction of this relationship (Copley, 1991;Wang et al, 2008;Houqe et al, 2015;Braam & Borghans 2014;El Ghoul et al, 2016;Ernstberger and Gruning, 2013).…”

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confidence: 99%

Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

Odoemelam¹,

Ofoegbu²

2018

Preprint

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The aim of this study was to compare the influence of corporate board characteristics on the extent of environmental disclosure quantity of listed firms in two leading emerging economies in Africa, South Africa (integrated reporting framework) and Nigeria (traditional reporting framework). Methods: The sample was comprised of 303 firms including environmentally sensitive companies purposively selected for content analysis study in South Africa (213) and Nigeria (90). We used both descriptive, multivariate and regression models to comparatively analyze the differences about corporate board characteristics as determinants of the extent of their environmental disclosure quantity. Results: The results reveal a more significant positive association between board characteristics and environmental disclosure in South Africa and less relevant association in Nigeria. Also, the results support that board independence arrangement may serve as bonding mechanisms in weak reporting environments, suggesting a substitutive relationship between board independence and the regulatory framework. Quiet revealing a board with environmental committee show a higher tendency to be ecologic transparent in both countries. However, in a traditional reporting framework, the environmental committee is not enough; its effect was insignificant and highly significant in the integrated reporting framework. Further revealed is the significant positive effect of industry membership influence on environmental disclosure. In all estimated models of South Africa sample show that 45% of environmentally sensitive industries significantly influence environmental disclosure, while 51% is environmentally polluting industries in Nigeria show less concern on environmental disclosure. Interestingly, Audit firm size (Big4) positively and statistically significantly associated with overall environmental reporting in both countries. The results are consistent with stakeholder theory, agency theory, institutional and legitimacy theory suggesting that a strong board size, independent members of the board with auditing experience, the active environmental committee in conjunction with solid audit reputation may reduce information asymmetry. Our findings will be helpful for policymakers and other regulators who are interested in environmental impact reporting.

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Cross-country evidence on the importance of Big Four auditors to equity pricing: The mediating role of legal institutions

Cited by 80 publications

References 104 publications

The Influence of Corporate Governance on Environmental Disclosure of Listed Non-Financial Firms in Nigeria

The Influence of Corporate Governance on Environmental Disclosure of Listed Non-Financial Firms in Nigeria

Does the Form 20‐F reconciliation help ensure the financial reporting quality of cross‐listed IFRS firms? A comparison with cross‐listed non‐IFRS firms

Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

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