The impact of corporate governance mechanisms on real and accrual earnings management practices: evidence from Jordan

Al‐Haddad, Lara; Whittington, Mark

doi:10.1108/cg-05-2018-0183

Cited by 76 publications

(100 citation statements)

References 76 publications

(184 reference statements)

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“…It reports the coefficients of correlation. The nature of coefficients indicates that any residual non‐normal distribution in the variables of this study may be mild and are similar to those reported by prior studies (e.g., Al‐Haddad & Whittington, 2019; Fernandes et al, 2019; Giannarakis et al, 2019; Gerged, Beddewela, et al, 2020). Besides, VIF has been tested separately, and the finding suggests that multicollinearity does not seem to be a major concern that can affect the rigour of the results of the current study.…”

Section: Empirical Analysissupporting

confidence: 87%

“…Additionally, in an effort to address any potential endogeneity problems relating to omitted variables, the present study employs a set of firm‐specific factors to control for the studied associations (Wooldridge, 2010), which are selected to be in line with the previous literature (see Al‐Haddad & Whittington, 2019; Crifo & Forget, 2015; Fifka, 2013; Gerged, Al‐Haddad, & Al‐Hajri, 2020; Hassan, Roberts, & Atkins, 2020; Ntim, 2016). The control variables in this study are the firm size (SIZE), leverage (LEV), market to book ratio (MKTB), profitability (ROA) and audit type (BIG4).…”

Section: Methodsmentioning

confidence: 99%

“…ASE reformed the JCGC in 2009 for listed firms to adhere to (Al‐Haddad & Whittington, 2019). The JCGC of 2009 principally aimed at (i) protecting stakeholders' rights; (ii) developing a framework to regulate the association between ASE and its listees and (iii) defining boards rights, duties and other responsibilities (JCGC, 2009).…”

Section: Background Empirical Literature Review Theory and Hypothesmentioning

confidence: 99%

“…The JCGC of 2009 principally aimed at (i) protecting stakeholders' rights; (ii) developing a framework to regulate the association between ASE and its listees and (iii) defining boards rights, duties and other responsibilities (JCGC, 2009). Yet, even though the JCGC is implemented on a comply‐or‐explain basis, corporate managers may still be tempted to report on their sustainability performance to reduce the information asymmetry issue (Al‐Haddad & Whittington, 2019).…”

Section: Background Empirical Literature Review Theory and Hypothesmentioning

confidence: 99%

See 3 more Smart Citations

Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures

2020

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This study seeks to examine whether internal corporate governance (CG) mechanisms affect corporate environmental disclosure (CED) in emerging economies. Using a sample of 500 firm‐year observations, this study distinctively applies a linear panel quantile regression (PQR) model to examine the CG–CED nexus in Jordan. This technique is supplemented with conducting a two‐step dynamic generalised method of moment (GMM) model to overcome any potential occurrence of endogeneity problems. This study reports an increasing trend in CED practice among the sampled companies over the period of analysis, yet it is still at an early stage as compared with their developed counterparts. Furthermore, this study suggests that board size, board independence, CEO duality and foreign ownership have positive associations with CED. In contrast, managerial ownership, institutional ownership and ownership concentration are negatively associated with the disclosed amount of environmental information in the Jordanian context. Theoretically, board structures appeared to be more efficient than ownership structures in reducing agency conflicts by addressing the asymmetric gap of information and promoting the disclosure of environmental information. These findings add to the debate about whether ownership structures detrimental to CED in developing economies. Specifically, when it comes to spending money on CED, owners seemed to be more concerned about any reductions in their share of the pie and may, therefore, be less motivated to disclose their companies' environmental information. This paper provides managers, owners and policymakers with a set of context‐specific recommendations related to the crucial need for a more concerted effort to integrate governance and environmental regulations in order to ensure sustainability in emerging markets.

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Section: Empirical Analysissupporting

confidence: 87%

Section: Methodsmentioning

confidence: 99%

Section: Background Empirical Literature Review Theory and Hypothesmentioning

confidence: 99%

Section: Background Empirical Literature Review Theory and Hypothesmentioning

confidence: 99%

See 2 more Smart Citations

Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures

2020

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“…Even though there has been plenty of research on CSR in China, it can be considered irrelevant for two main reasons. A major portion of the research has utilized the accrual earnings management (AEM) (discretionary accruals) approach to measure the EM [3,[16][17][18][19]. This can easily be manipulated by changing the operating activities rather than manipulating the discretionary accruals.…”

Section: Introductionmentioning

confidence: 99%

Are Socially Responsible Companies Really Ethical? The Moderating Role of State-Owned Enterprises: Evidence from China

et al. 2020

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The present research aims to explore the relationship between corporate social responsibility and earnings management (EM). For this study, we utilized the panel data of companies registered with the Shanghai and the Shenzhen stock exchanges. The data consists of 10years of financial data from 2010 to 2019. After a thorough investigation, we discovered that CSR hurts the EM practice, which mainly relates to the prevalence of the ethical stance and the moral stance in corporate decision-making. When firms engage in activities about CSR, they tend to improve their corporate image and their social image as the stakeholder satisfaction level increases. The results also indicate that, when firms engage in these types of activities, they tend to incorporate practices related to CSR as part of their corporate strategy. This also results in a higher moral standing amongst the decision-makers, and they prefer to reject malpractices, such as EM, as a result. In the case of the Chinese state-owned firms, the results indicate that these companies increasingly engage in real earnings management (REM), even though they have increased their CSR activities. The results point towards management opportunism with Chinese state-owned companies.

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Corporate environmental disclosure and earnings management—The moderating role of corporate governance structures

2021

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Our study examines whether internal corporate governance (CG) mechanisms moderate the relationship between a firm's engagement in corporate environmental disclosure (CED) and earnings management (EM) practices in an emerging economy. Using a sample of 100 Jordanian listed firms from 2010 to 2014 (i.e., 500 firm‐year observations), our findings reveal that while the relationship between CED and earnings manipulations is negative, the links between CG arrangements and EM are heterogeneous in that they might have either reduced or increased earnings manipulations in Jordan. Furthermore, some CG structures, such as board size, managerial, and institutional ownership structures have moderating effects on the CED‐EM nexus. Our research highlights the significance of considering internal CG mechanisms to explain the link between CED and EM in the context of emerging economies. Our results help to explain and place into setting the earlier mixed results on the association between CED and earnings manipulations and most importantly add to the debate about whether CG structures detrimental to the CED‐EM nexus. This study allows for a richer understanding of how managers respond to CED initiatives and CG reforms in relation to reducing earnings manipulations, which offers policymakers, board directors and managers, a set of context‐specific recommendations related to the crucial need for more concerted efforts to ensure corporate sustainability in emerging economies.

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The impact of corporate governance mechanisms on real and accrual earnings management practices: evidence from Jordan

Cited by 76 publications

References 76 publications

Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures

Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures

Are Socially Responsible Companies Really Ethical? The Moderating Role of State-Owned Enterprises: Evidence from China

Corporate environmental disclosure and earnings management—The moderating role of corporate governance structures

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