The Impact of Family Ownership on Quality and Disclosure of Internal Control in Pakistan

Jadoon, Imran Abbas; Noreen, Umara; Ayub, Usman; Tahir, Muhammad; Shahzadi, Naima

doi:10.3390/su13168755

Cited by 6 publications

(8 citation statements)

References 50 publications

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“…This result suggests that the higher percentage of family directors on the board mitigates the negative relationship between ICQ and ARL. This result is in line with that reported by Jadoon et al. (2021) who provide evidence that family involvement in management (board of directors) is negatively associated with ICQ, leading to higher audit risk which translates into more audit effort and thus longer audit delays.…”

Section: Empirical Results and Analysissupporting

confidence: 92%

“…These weaknesses may increase the likelihood of committing anomalies and frauds. Similarly, Jadoon et al (2021) provide evidence that family involvement in top management (CEO) is negatively associated with ICQ in the Pakistani setting. Given the fact that family directors represent the block family owners, the presence of high percentage of family directors may reduce ICQ.…”

Section: 2mentioning

confidence: 93%

“…These weaknesses may increase the likelihood of committing anomalies and frauds. Similarly, Jadoon et al. (2021) provide evidence that family involvement in top management (CEO) is negatively associated with ICQ in the Pakistani setting.…”

Section: Research Hypothesesmentioning

confidence: 93%

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The association between internal control quality and audit report lag in the French setting: the moderating effect of family directors

Gontara¹,

Khelil

Khlif

2022

JFBM

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PurposeThe purpose of the paper is to examine the association between internal control quality (ICQ) and audit report lag (ARL) and to test whether family directors affect the relationship.Design/methodology/approachICQ is measured by using the framework developed by Michelon et al. (2015), while ARL is measured as the number of days from fiscal year-end to the date of the auditor's report.FindingsUsing a sample of 190 French companies over the period of 2016–2019, the authors document that ICQ is negatively associated with ARL, suggesting that ICQ represents a key determinant of audit delay. When testing for the moderating effect of family directors on this relationship, findings show that under high percentage of family directors on the board, this relationship becomes insignificant.Originality/valueThis paper extends previous research on audit delays by investigating the moderating effect of family directors on the relation between ICQ and ARL in the French setting. The empirical evidence highlights the adverse effect of the concentration of family directors on the board on timely disclosure as proxied by ARL.

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Section: Empirical Results and Analysissupporting

confidence: 92%

Section: 2mentioning

confidence: 93%

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The association between internal control quality and audit report lag in the French setting: the moderating effect of family directors

Gontara¹,

Khelil

Khlif

2022

JFBM

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“…Family ownership (FAMOWN) showed mixed results, having negative associations with operating margins and positive ones with financial performance. The result partially supported the fifth hypothesis and conformed to Jadoon et al (2021) . This may be due to mixed opinions about the family stakes in Pakistan.…”

Section: Resultssupporting

confidence: 77%

“…Controversy existed about whether family stakes in ownership moved the performance in a positive or negative direction. The family business contributed to a large extent to the national economy ( Jadoon et al, 2021 ). From the agency perspective, family ownership was pronounced unfavorable for the firm ( Amin et al, 2022 ).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

Yuan

Hussain²,

Khalid³

et al. 2023

Front. Psychol.

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This study empirically investigates the moderating effect of board activeness on the relationship between the structure of corporate ownership and firm performance. The objective was evaluated using the hierarchal panel regressions with data from non-financial companies of the Pakistan Stock Exchange from 2009 to 2018, operationalizing the ownership structure as state ownership, associated companies, foreign ownership, ownership concentration, institutional ownership, and family ownership, and firm performance as operating performance, financial performance, and stock market performance. The findings of the study revealed that operating, financial, and stock market performance were favorably influenced by the ownership stakes of the state, associated concerns, institutions, and foreigners. Family interests proved to be diverse for the firm performance. The isolated effect of the board consistently uplifted the firm productivity, but its interactional impact with all the ownership stakeholders postulated differential outcomes for internal and external performance. The study provides valuable insights for policymakers and investors to make optimal strategies to manage ownership interests and enhance value.

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Independent female directors and integrated reporting quality: The moderating role of family ownership

Ghaleb,

Qaderi,

Al‐Qadasi

2024

Corp Soc Responsibility Env

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Female directors can affect corporate reporting through their monitoring functions. However, it is unclear whether independent female directors (IFDs) are preferred to gain a higher quality of integrated reporting (IRQ) in a context such as Malaysia, where family ownership is dominated. This study examines the relationship between IFDs and IRQ, as well as the influence of family ownership on the IFDs‐IRQ nexus. Using all Malaysian public listed companies that have voluntarily adopted IR strategy over the 2017–2021 period, the current study uses different regression models to analyze the data and provide robust results. The results find that IFDs are positively associated with IRQ. Additionally, there is a significant negative correlation between family ownership and IRQ. Furthermore, family ownership negatively moderates the positive IFDs‐IRQ relationship. The results of the subsample analysis indicate that the relationship between IFDs and IRQ is positive in companies that do not have family ownership, but negative in those that do have family ownership. This finding supports the main conclusion regarding the moderating impact of family ownership. The additional analyses support the primary findings that highlight the crucial function of IFDs in enhancing IRQ and the influence of family ownership in attenuating the favorable impact of IFDs. This research extends the existing body of literature on IR by examining the significance of female independence beyond female representation and exploring the potential impact of family ownership on this advantageous characteristic.

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The Impact of Family Ownership on Quality and Disclosure of Internal Control in Pakistan

Cited by 6 publications

References 50 publications

The association between internal control quality and audit report lag in the French setting: the moderating effect of family directors

The association between internal control quality and audit report lag in the French setting: the moderating effect of family directors

Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

Independent female directors and integrated reporting quality: The moderating role of family ownership

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