The effect of board of directors and audit committee effectiveness on internet financial reporting

Bin-Ghanem, Hasan O.; Ariff, Akmalia M.

doi:10.1108/jaee-07-2014-0037

Cited by 39 publications

(60 citation statements)

References 69 publications

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“…Consequently, most MENA countries have thus engaged in economic and financial reforms (such as developing national stock exchanges, issuing national governance codes, and improving business-related laws and regulations) with the aim of encouraging domestic savings and attracting foreign investments (Al-Shammair and Al-Sultan 2010; Ebaid, 2013;Aljifri et al, 2014;Albitar, 2015;Al-Janadi et al, 2016;Elghuweel et al, 2017;Elkelish, 2017;Hassoun and Aloui, 2017;Khalil and Maghraby, 2017;Hessayri and Saihi, 2018). Indeed, the empirical evidence supports the role of good governance practices in enhancing market efficiency and the information environment of the MENA countries (Lagoarde-Segot and Lucey, 2008;Samaha et al, 2012;Albitar, 2015;Al-Janadi et al, 2016;Bin-Ghanem and Ariff, 2016;Al-Basaam et al, 2018).…”

Section: The Governance Environment In Mena Emerging Economiesmentioning

confidence: 82%

Corporate boards, shareholding structures and voluntary disclosure in emerging MENA economies

Sarhan

Ntim

2019

JAEE

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Corporate boards, shareholding structures and voluntary disclosure in emerging MENA economies AbstractPurpose: This paper investigates the level of voluntary compliance with, and disclosure of, corporate governance best practices, and the extent to which board characteristics and shareholding structures can explain discernible differences in the level of voluntary corporate governance disclosure in a number of emerging Middle Eastern and North African (MENA) economies.Design/methodology/approach: The paper uses a number of multivariate regression methods, namely ordinary least squares, weighted, non-linear, lagged-effects, two stage least squares and fixed-effects regression techniques to analyse data collected for a sample of listed corporations in emerging MENA economies from 2009 to 2014.Findings: First, in general, MENA listed firms have a relatively lower level of voluntar y compliance with, and disclosure of, corporate governance practices compared to listed firms in developed countries. Second, our evidence suggests that corporate board characteristics, including board diversity have a positive association with the level of voluntary corporate governance disclosure. In contrast, the findings indicate that unitary board leadership structure, director shareholdings, and government shareholdings impact negatively on the level of voluntary corporate governance disclosure. The study does not, however, find any evidence to suggest that family shareholdings have any significant relationship with the level of voluntar y corporate governance disclosure. The findings are generally robust to alternative measures and potential endogeneity problems.Originality/value: This is one of the first empirical efforts at investigating the association between corporate governance mechanisms and voluntary disclosure in emerging MENA economies that observably relies on a multi-theoretical framework within a longitudinal crosscountry research setting.

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Section: The Governance Environment In Mena Emerging Economiesmentioning

confidence: 82%

Corporate boards, shareholding structures and voluntary disclosure in emerging MENA economies

Sarhan

Ntim

2019

JAEE

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“…Furthermore, Petter et al (2007) recommended examining content validity using a thorough literature review related to the conceptual domain of the construct. As presented earlier, the four indicators forming the ACE index have been frequently used collectively in measuring the AC effectiveness (Lin et al, 2006;Pucheta-Martínez and De Fuentes, 2007;O'Sullivan et al, 2008;Aldamen et al, 2012;de Andrés Suárez et al, 2013;Abdel-Meguid et al, 2014;Bin-Ghanem and Ariff, 2016;Wan Mohammad et al, 2016). This high consensus on the use of these constituent indicators testifies to the content validity of the ACE index.…”

Section: Ace Index Validity and Reliabilitymentioning

confidence: 85%

Does audit committee substitute or complement other corporate governance mechanisms

Hassan

Hijazi

Naser³

2017

MAJ

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Purpose The purpose of this paper is to examine the relation between audit committee (AC) and a set of other corporate governance mechanisms in one of the emerging economies, United Arab of Emirates (UAE). In particular, the current study examines whether an effective AC can serve as a substitute or as a complement mechanism to board characteristics and ownership structure of Emirati listed non-financial companies. Design/methodology/approach Using substitution and complementary theories, a panel data from 48 nonfinancial companies listed on the UAE Stock Exchanges [Abu Dhabi Stock Exchange and Dubai Financial Market] during the period between 2011 and 2013 were used in the current study. A composite measure of four proxies has been used to measure the AC effectiveness, namely, AC size, independence, financial expertise and diligence. To test the hypotheses formulated for the study, a logistic regression model was used to identify the influence of a set of board characteristics and ownership structure variables on the effectiveness of the AC after controlling for firm size, auditor type, industry type and profitability. Findings While AC effectiveness appeared to be positively associated with board size and board independence, it is negatively associated with CEO duality. This points to a complementary governance relation. On the other hand, the negative relationship between AC effectiveness and each of institutional and government ownership suggests substitutive relations. Research limitations/implications The main shortcoming of the current study is that it examines the influence of a certain set of corporate governance factors on the effectiveness of AC. Other corporate governance mechanisms may, however, contribute to the effectiveness of AC. The findings of the study can be used by companies’ managements and regulators in the UAE to improve the corporate governance system. Originality/value To the best of researchers’ knowledge, this study provides the first evidence about the interaction among multiple governance mechanisms required by the code of corporate governance issued by the UAE Ministry of Economy in 2009. The current paper is expected to add to the limited AC literature in Middle East and North African countries in general and Arab World in particular.

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“…Overall, their findings lend support for firms with a higher level of board ownership to include more independent directors on the audit committee to increase disclosure levels and reduce information asymmetry between firm management and investors. Bin-Ghanem and Ariff (2016) show that board of directors and audit committee effectiveness has significant influence on the level of internal financial reporting disclosure. Aghayi et al (2013) examined the effect of teaching auditing to information users reduces expectation gap among them in the Iran auditing market.…”

Section: Theoretical Issues and Literature Reviewmentioning

confidence: 96%

The relationship between audit components and audit expectation gap in listed companies on the Tehran stock exchange

Salehi

Jahanbin

Adibian

2019

JFRA

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Purpose The expectation gap between auditors and users has recently been the topic of many controversies. This paper aims to evaluate the relationship between auditor’s characteristics and audit expectation gap among information users in listed companies on the Tehran stock exchange market. In other words, the study attempts to find whether there is a significant relationship between audit components and the audit expectation gap or not. Design/methodology/approach The multiple regression model is used to test the hypotheses. Research hypotheses are tested using a sample of 78 listed companies on the Tehran stock exchange during 2012-2016, by using integrated data technique of the multiple regression model. Findings The findings show that standard audit fees are not significantly associated with the audit expectation gap. Furthermore, audit fees are negatively associated with the audit expectation gap, which provides that allocated audit price in financial statements gives useful information for external and internal individuals. Predictably, it is recommended that audit opinion significantly determines the level of the audit expectation gap. The authors also find that the independence of the director boards and audit committee members fulfill the expectation gap of individual users. Moreover, finding the negative impact of audit firms ranking on the expectation gap, supports the idea of higher ranked audit firms provide high quality services, and consequently, more reliable information. Finally, the results show that the audit record is positively associated with the audit expectation gap. Originality/value As all recent studies on the expectation gap were qualitative, the present study is the first paper, which measures the expectation gap quantitatively through the statistical method.

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The effect of board of directors and audit committee effectiveness on internet financial reporting

Cited by 39 publications

References 69 publications

Corporate boards, shareholding structures and voluntary disclosure in emerging MENA economies

Corporate boards, shareholding structures and voluntary disclosure in emerging MENA economies

Does audit committee substitute or complement other corporate governance mechanisms

The relationship between audit components and audit expectation gap in listed companies on the Tehran stock exchange

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