The effect of controlling shareholders’ excess board seats control on financial restatements: evidence from Taiwan

Young, Chaur Shiuh; Tsai, Liu Ching; Hsu, Hui Wen

doi:10.1007/s11156-007-0054-7

Cited by 26 publications

(21 citation statements)

References 43 publications

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“…Research has pointed out the potential for corporate governance systems to impact the behaviors of firms and hurt minority shareholders (Jaggi et al, 2009;Vafeas, 2000;Faccio et al, 2001;Chin et al, 2006Chin et al, , 2009Young et al, 2008; see also Jiraporn et al, 2005, on a related issue). This may be more likely in East Asia and other areas where there are greater divergences between voting rights and cash flow rights of the ultimately controlling owner than exists in the USA (Anderson and Reeb, 2003;Chin et al, 2009)[3].…”

Section: Corporate Governance Systemsmentioning

confidence: 99%

The effects of legal protections and control‐ownership divergences on investor perceptions of foreign earnings

Chin

Chen²,

Kleinman

et al. 2013

Journal of Financial Regulation and Compliance

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Purpose -The purpose of this paper is to investigate the impact of corporate internationalization, governance structures, and legal protections on the foreign earnings response coefficient (FERC). The FERC is a measure of the value-relevance of foreign earnings. Design/methodology/approach -Data were collected on 3,653 Taiwanese firms which had overseas investments. The authors examined the impact of the site of their overseas investments and the nature of the legal code of the investee country on the investor perceptions of firms' reported foreign and domestically-generated earnings. Also examined was the impact of corporate governance arrangements (e.g. the difference between the owners' cash flow and voting rights) on the same components of the firms' earnings. Findings -The empirical findings suggest that an aggressive internationalization strategy (foreign direct investment) has positive effects on the value relevance of foreign earnings, but that this strategy is impacted by the firm's own corporate governance arrangements and the target of its overseas investment efforts. While foreign investments bring about growth and profits, they expose the investors to the risk of expropriation by investee countries and corporate insiders. Originality/value -The importance of the findings is that they should help regulatory agenciesand firms themselves -to better understand factors that can promote the global expansion of domestic enterprises.

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Section: Corporate Governance Systemsmentioning

confidence: 99%

The effects of legal protections and control‐ownership divergences on investor perceptions of foreign earnings

Chin

Chen²,

Kleinman

et al. 2013

Journal of Financial Regulation and Compliance

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show abstract

“…Chan and Mo, 1998; examine non-Anglo-American settings. Another recent study is that by Young et al (2008a) in Taiwan. Its pervasiveness, therefore, warrants studies in various countries (Flanagan et al, 2008).…”

Section: Financial Restatements and Governancementioning

confidence: 99%

Financial restatements and corporate governance among Malaysian listed companies

Abdullah

Yusof

Nor

2010

Managerial Auditing Journal

118

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Purpose-This paper seeks to examine the effects of Malaysian Code on Corporate Governance on the nature of financial restatements in Malaysia and whether corporate governance characteristics are associated with financial restatements. Design/methodology/approach-Data for this paper are obtained from annual reports that had been restated for the period of 2002-2005 with firm-years being the unit of observation. A control group comprising non-restating firms is formed using match-pair procedures where restated and non-restated firms are matched by size, industry, exchange board classification, and financial year end. The data are subsequently analyzed using a t-test, the Pearson correlation and logistic regression. Findings-The results show that the primary reason for misstating the accounts is to inflate earnings. The nomination committee of the firms that restated is found to be less independent with higher managerial ownership. The logistic regression analysis indicates that the extent of ownership by outside blockholders deters firms from misstating accounts. Surprisingly, audit committee independence is associated with the likelihood of financial misstatement. Financial restatements, nevertheless, are not found to be associated with board independence, managerial ownership, and CEO duality. Finally, the results show that firms with high level of debts are more likely to commit in financial misstatement. Practical implications-The research is significant as it provides evidence on the role of corporate governance, especially the independence of the nomination committee and extent of ownership by outside blockholders in Malaysia. It shows that outside blockholders is effective in disciplining managers so that the accounts so prepared are not misleading. The move in 2007 by the Malaysian Government to require companies audit committee to be composed of only independent and non-executive directors, as well as requiring audit committee members to be financially literate, should be seen as important in ensuring the effectiveness of the audit committee. Originality/value-This research is considered as the first study which examines the effects of corporate governance variables on the incidents of financial restatements in a developing country. The findings of this paper would be useful for policy makers in evaluating the importance of corporate governance in emerging countries, specifically on the issue of quality financial reporting.

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“…Therefore, it is not optimal to use Tobit regressions to take into account the censoring of the data at zero. Both the count nature of the (Lambert, 1992;Debreceny and Rahman, 2005;Young et al, 2008). As robustness checks, we have also estimated all models using Tobit regressions and zero-inflated negative binomial regressions [4].…”

Section: Information Provision Model and Estimation Methodsmentioning

confidence: 99%

Why do private non-profit organizations provide information on the Internet?

Hulle

Dewaelheyns

2014

Social Enterprise Journal

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Purpose – The aim of this study is to show the provision of research measures information on the Internet by private non-profit organizations (NPOs) and provide insight on underlying drivers. Design/methodology/approach – This research involves scoring websites of Belgian NPOs on the basis of their information dissemination and applies univariate and multivariate statistical methods to analyze the driving forces. It also provides two illustrating case studies. Findings – The drivers of Internet information provision in our sample organizations show many similarities to those found for for-profit corporations. However, contrary to the latter, NPOs include little financial information and focus on their goals. Furthermore, in line with the notion that insiders-workers may capture the organization, we find that the degree of professionalization has a significantly negative impact on disclosure. Overall, outside pressures as predicted by neo-institutional theory and agency issues are important in shaping communication of information. In fact, the two cases indicate that the pressures, as predicted by neo-institutional theory, may easily lead NPOs to cater to key stakeholders in much the same way as for-profit corporations cater to customers. Research limitations/implications – The results are indicative of general forces driving NPO behaviour. Of interest would be a more in-depth analysis to link the prevalence of certain forces to specific governance models and to contextual factors. Practical implications – These findings may give users/visitors of websites better insight into the forces shaping information communication policies of an NPO. Originality/value – This paper adds to the scant evidence on Internet information provision by private non-profit organizations and its drivers. As such, it offers an opportunity to study the forces that are likely shaping decision-making within NPOs.

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The effect of controlling shareholders’ excess board seats control on financial restatements: evidence from Taiwan

Abstract: Controlling shareholders, Control rights, Cash-flow rights, Excess board seats control, Financial restatements, M41, G34,

Cited by 26 publications

References 43 publications

The effects of legal protections and control‐ownership divergences on investor perceptions of foreign earnings

The effects of legal protections and control‐ownership divergences on investor perceptions of foreign earnings

Financial restatements and corporate governance among Malaysian listed companies

Why do private non-profit organizations provide information on the Internet?

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