On the Association Between Corporate Governance and Earnings Quality

Sivaramakrishnan, K.; Yu, Shaokun Carol

doi:10.2139/ssrn.1014243

Cited by 26 publications

(20 citation statements)

References 39 publications

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“…• the extant literature provides a plethora of evidence that a board better designed to monitor management helps prevent accounting manipulation and protects outside investors (e.g., Carcello et al, 2006;Sivaramakrishnan and Yu, 2008;Duh et al, 2009) • most corporate governance scandals since the turn of the century have involved some aspect of accounting manipulation or fraud (e.g., Enron, Parmalat, Royal Ahold)…”

Section: Methodsmentioning

confidence: 99%

Board structure and monitoring effects in different institutional settings: a comparison between Italy and the UK

Campa

Donnelly

2013

IJCG

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This paper analyses how investor protection provided by the institutional setting in which a firm operates affects the quality of its board of directors. It also investigates whether firms operating in contexts with weaker investor protection rely more on internal corporate governance to prevent dysfunctional behaviour by insiders. This is achieved by the analysis of a matched pair sample of firms listed on the Italian and the UK stock markets. The results indicate that the board composition and structure are of higher quality in the UK. Our findings also suggest that the effectiveness of a boards' monitoring, measured by its ability to mitigate earnings management, is stronger in Italy. Thus, in a context where the institutional setting provides less investor protection, firm-level governance can substitute for the institutional deficit.

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Section: Methodsmentioning

confidence: 99%

Board structure and monitoring effects in different institutional settings: a comparison between Italy and the UK

Campa

Donnelly

2013

IJCG

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“…In this study, the audit committees are expected to play a significant role as the monitoring device and intended to strengthen corporate governance functions which indirectly will likely improve the financial reporting quality (Sivaramakrishnan and Yu 2008). To improve the financial reporting quality of GLCs, the transfor mation program is equipped with the Green Book manual to provide guidelines in enhancing board effec-tiveness.…”

Section: Theoretical Framework and Hyphotheses Developmentmentioning

confidence: 99%

An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia

Jamil

Nelson

2011

GADJAH MADA INT. J. BUS.

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Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee's effectiveness on the financial reporting quality among the Malaysian GLCs following the transformation program. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency of meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003)(2004)(2005)(2006)(2007)(2008)(2009). As of 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data that resulted in the total number of firm-year observations to 120 for six years (years 2003-2009). Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. Agency theory was applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. The study is important as it provides additional knowledge about the impact of audit committees effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committees effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession.Abstrak: Kualitas pelaporan keuangan telah di bawah pengawasan, terutama setelah runtuhnya perusahaanperusahaan besar. Tujuan utama dari penelitian ini adalah untuk mengetahui efektivitas komite audit pada kualitas pelaporan keuangan antara GLCs Malaysia yang mengikuti program transformasi. Secara khusus, studi ini meneliti dampak dari karakteristik komite audit (kebebasan, ukuran, frekuensi pertemuan dan keahlian keuangan) pada manajemen laba pada periode sebelum dan setelah program transformasi (2003)(2004)(2005)(2006)(2007)(2008)(2009) 288Keywords: audit committees; earnings management; GLCs transformation program; Malaysia pelaporan keuangan dipengaruhi oleh independensi komite audit. Teori keagenan diaplikasikan untuk menjelaskan komite audit, sebagai mekanisme pemantauan serta mengurangi biaya agensi melalui keunggulan kompetitif dalam pengetahuan, keterampilan, dan keahlian terhadap kualitas pelaporan keuangan yang diperolehnya. Penelitian ini penting karena memberikan pengetahuan tambahan tentang dampak efektivitas komite audit dalam mengurangi manajemen laba, dan membantu praktisi, pembuat kebijakan dan regulator seperti Institut Akuntan Malaysia, Komisi Efek dan pemerintah untuk menentukan cara untuk meningkatkan efektivitas komite audit dan meningkatkan pelaporan keuangan GLCs, serta meningkatkan kualitas profesi akuntansi.

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“…(2007) researching the relationship between discretionary accrual with commissioner of board measurement. Sivaramakrishnan and Shaokun (2008) researching the effect of governance corporate structure on accrual quality. The result indicates that if the mechanism of governance corporate runs well, then the profit quality is high and the company with adequate mechanism of governance tends to have high accrual quality.…”

Section: Introductionmentioning

confidence: 99%

Implementation the International Financial Reporting Standards as a Moderating Variable of the Relationship of Corporate Governance with Earnings Management

Komalasari¹

2017

ERSJ

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In general, this research is aimed at providing empirical evidence concerning the analysis of the adoption of IFRS as a moderating variable in the relation of corporate governance with earnings management. In particular, there are two objectives in this research, first, to provide empirical evidence concerning the analysis of the adoption of IFRS as a moderating variable in the relation between the independent of commissioners to the number of board of commissioners and earnings management; second, to analyze the adoption of IFRS as a moderating variable in the relation between the dual position audit committee members and earnings management. The research was conducted on companies listed on the Stock Exchanges of Germany, Denmark, France, and the Netherlands from 2002 to 2013. It primarily employed agency theory. Moreover, it employed primary variables including adoption of IFRS, corporate governance, in particular the proportion of independent commissioners to the board of commissioners, dual positions of audit committee members and earnings management.The test results in this research conclude that: the results of testing of the model of accrual earnings management with the samples of companies listed on the stock exchanges of Germany, France, the Netherlands and Denmark indicated that the adoption of IFRS strengthened negative relation of the proportion of independent commissioners to the number of board of commissioners with accruals earnings management, so that the hypothesis 1 was acceptable. The hypothesis 2 stating the adoption of IFRS strengthen negative relation between the multi position of audit committee members and accrual earnings management was acceptable.

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On the Association Between Corporate Governance and Earnings Quality

Cited by 26 publications

References 39 publications

Board structure and monitoring effects in different institutional settings: a comparison between Italy and the UK

Board structure and monitoring effects in different institutional settings: a comparison between Italy and the UK

An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia

Implementation the International Financial Reporting Standards as a Moderating Variable of the Relationship of Corporate Governance with Earnings Management

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