The effect of corporate governance and accruals quality on the corporate cash holdings: study on the manufacturing companies in Indonesian Stock Exchange

Wijaya, Anggita Langgeng; Bandi,

doi:10.20869/auditf/2018/151/021

Cited by 1 publication

(1 citation statement)

References 10 publications

(17 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Research on earnings management has reported that firms with poor accrual quality, i.e. high information asymmetry, tend to hold higher levels of cash (Mansali et al, 2019;Wijaya, 2018) and that real activities management have a positive impact on CH (Khuong et al, 2020). Koo et al (2017) found that higher quality reporting was positively associated with dividend payments, indicating that higher earnings quality could negatively impact the level of CH.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Corporate cash holdings and disclosure violations: an empirical investigation of Jordanian listed companies

Alsmadi

Alkhataybeh

Shakhatreh

2022

JIABR

View full text Add to dashboard Cite

Purpose This study aims to examine the impact of low-quality financial statements; that is, disclosure violations reported by the Securities Exchange Commission related to the level of cash holdings (CH) of firms listed on the Amman Stock Exchange (ASE). Design/methodology/approach Using panel data from 107 ASE-listed companies from 2009 to 2018, the study uses generalized method of moment estimation to examine the research hypothesis. This study hypothesize that disclosure violations can affect the level of CH and control for several variables that affect this level. Findings The results show that disclosure violations significantly affect the level of CH and that cash flow, capital expenditure and debt issues have a significantly positive impact on corporate CH. On the other hand, the market to book ratio and sales growth were found to be insignificant. Research limitations/implications The limitations of the research include the fact that information on research and development and equity issues were not available, so were not included in the examination. Practical implications It is recommended that managers enhance the quality of disclosures since this allows them to hold lower levels of cash and exploit more investment opportunities. Policymakers are recommended to supervise firm disclosures closely and create ratings for disclosure quality. Originality/value To the best of the author’s knowledge, this is the first empirical research on the association between proven low-quality disclosures and the level of corporate CH among Jordanian listed companies.

show abstract