The Impact of Ownership Types on the Value of Discretionary Accruals: What Is the Role of Audit Committee? Evidence From Pakistan

Khan, Sattar; Kamal, Yasir; Khan, Azhar Abbas; Hussain, A. Ameer; Rafiq, Muhammad; Bibi, Maryam; Shah, Syed Fahad Ali; Shah, Zahir; Khan, Muhammad Asad

doi:10.32479/ijefi.10081

Cited by 7 publications

(4 citation statements)

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“…Keeping in view the importance of independent, female and financially expert directors, this study is intending to check the role of the independent, financially expert as well as female directors in attenuating EM for the pre- and post-CCG-2017 period. In addition to this, in Pakistan researcher has linked ownership structure [, audit committee attributes [ 34 , 40 , 53 ], the board of directors attribute [ 36 ] and overall CG variables with EM [ 3 , 28 , 29 , 44 , 45 ]. To the best of our knowledge, there is no study in the concerned literature by linking board attributes to EM with focusing the impact of CCG-2017 in Pakistan.…”

Section: Introductionmentioning

confidence: 99%

Board of directors and earnings manipulation: evidence from regulatory change

et al. 2022

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The purpose of this paper is to examine the effect of the board of directors’ related clauses such as independence, female director, CEO Duality and the expertise of director included in the Code of Corporate Governance 2017 (CCG-2017) on earnings management with the pre- and post-CCG-2017 analysis. This study has used the sample of 323 non-financial listed firms of the Pakistan Stock Exchange from 2015 to 2019. Data were manually collected from companies’ annual reports, and two proxies of earnings management have used: one is discretionary accruals and the other is real activity manipulation. The results of the study show that as compared to the pre-period of CCG-2017 in the post-period of CCG-2017 board independence, expertise and female inclusion has increased significantly. Moreover, board independence and financially expert directors are negatively related to discretionary accruals, while there is a positive relationship of female directors with discretionary accruals, which is also same for real activity manipulation. The findings also show that there is no relationship of board independence/outside directors and expert directors with real activity manipulation. This study recommended the CCG-2017 reforms introduced by the regulator. Moreover, we recommend that the regulator needs to augment the authentic independence of independent/outside directors in listed firms (concentrated ownership context) of Pakistan. This study adds its part in the corporate governance literature by focusing board attributes with regulatory reforms on earnings manipulation, which is lacking in the related literature in general and in Pakistan an emerging economy in particular.

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Section: Introductionmentioning

confidence: 99%

Board of directors and earnings manipulation: evidence from regulatory change

et al. 2022

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“…The perpewa (Celtis Zenkeri) species is more prevalent in the forest reserve than in the open vegetation; hence, it is very scarce to come by. The strong influence of perpewa (Celtis Zenkeri) species on the price of fuelwood is primarily due to the limitedness of its availability even though it possesses the required attributes of a suitable species for fuelwood, such as high efficiency in energy generation, burning durability, emission of less smoke and less sparkling (Chavan et al , 2016; Khan et al , 2020).…”

Section: Discussionmentioning

confidence: 99%

Market structure and determinants of the pricing of the fuelwood in the Bono region of Ghana

Atinga

Bannor

Sarfo

2023

IJESM

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Purpose This study aims to examine the market structure and the factors influencing the price of fuelwood in the Dormaa Municipal in the Bono region of Ghana. Design/methodology/approach A total of 200 fuelwood harvesters, 20 wholesalers and 20 retailers were sampled by using probability and non-probability sampling methods. Gini coefficient was used to analyse the market structure, whereas quantile regression was used to analyse the factors influencing the pricing of fuelwood. Findings The study results indicated that the fuelwood harvesters’ market is less concentrated, with a Gini coefficient of 0.22, likewise the fuelwood intermediaries’ market, with Gini coefficients of 0.22 and 0.32 for wholesalers and retailers, respectively. The price of fuelwood decreased when sold through the retailer and wholesaler outlets, but the price increased when sold via the end-user outlet. Less smoky fuelwood species attracted higher prices, whereas easy-to-light fuelwood species were sold at lower prices. Furthermore, fuelwood from Perpewa (Celtis zenkeri) and Acacia (Senna siamea) species received the highest prices in the market. It is recommended that fuelwood harvesters establish woodlots with acacia (Senna siamea), especially and Perpewa (Celtis zenkeri), both of which emit less smoke and have high calorific value with fast rotation period. This will ensure fuelwood availability and offer better prices to the harvesters, as such species command high prices in the market. Originality/value There is paucity or near unavailability of literature on the market structure and the influence of the hedonic attributes on different quartile prices of fuelwood; the result of this study provides the foundational springboard for future studies on fuelwood marketing.

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“…In addition, the following factors motivated us to carry out this research study: first, Pakistan offers a suitable setting to examine the role of BOD features on EM due to the revision related to BOD and AC attributes in CCG-2017 introduced by the Securities Exchange Commission of Pakistan (SECP). Second, there are many contextual studies that link the BOD features with EM (Khan et al ., 2019; Khan et al , 2020; Khan et al , 2022a, 2022b; Khan and Kamal, 2021; Rasheed et al , 2019; Sajjad et al , 2019; Umer et al , 2019). However, these studies linked various CG variables with a single proxy of EM with a small sample and an older data period.…”

Section: Introductionmentioning

confidence: 99%

“…Whereas previous studies have only focused on EM (Chen et al , 2020; Faisal et al , 2021; Khan and Kamal, 2021). Second, most of the previous EM studies (Barghathi et al , 2021; Khan et al , 2019a, 2019b; Khan et al , 2020; Kontesa et al , 2021; Wang et al , 2019) are based on agency theory, which considers the board as an important CG mechanism to monitor management. Although the agency role of monitoring is paramount for BOD, the advisory role (resource dependence role) of BOD is also very important.…”

Section: Introductionmentioning

confidence: 99%

Corporate board, audit committee and earnings manipulation: does the corporate regulation matter? An emerging economy perspective

Khan,

Kamal

2023

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Purpose This paper aims to investigate the impact of the revised Code of Corporate Governance 2017 (CCG-2017) clauses pertaining to board independence, mandatory inclusion of female directors, audit committee (AC) chair independence and directors’ expertise on earnings manipulation. Design/methodology/approach Using an unbalanced panel of 323 listed companies from 2015 to 2019, this study uses panel data regression models with a robust methodology called difference-in-differences to tackle the potential endogeneity. Findings This study’s findings show that, as compared to the pre-CCG-2017 period, board- and AC-related variables increased significantly in the post-CCG-2017 period. Furthermore, financial experts on the board and board independence have a negative effect on discretionary accruals (DAs), whereas female directors and DAs are positively related, as is real activity manipulation. The AC-related variables, such as AC independence, expertise in AC, and AC chair independence, are significantly different from the preperiod to the postperiod, whereas their relationship is not according to the hypotheses of the study. Moreover, these results are robust to additional analysis of the alternative proxies for female directorship and the endogeneity problem. Practical implications The findings of this study have implications for regulators and practitioners who are concerned with the functions of the board of directors (BOD). The findings of this research study show that earnings management (EM) may be reduced by independent and expert directors. However, board gender diversity is not reducing the EM. Therefore, the decision to appoint female directors to the board should be based on their business and professional attributes rather than simply filling quotas or blindly adhering to regulations. Moreover, the findings of this research may assist the regulator in encouraging listed firms to enhance board governance via independence, diversity and competency, which are useful for effective monitoring. Originality/value This study fills a gap in the literature by providing the first evidence of country-specific regulation (CCG-2017), concerning the BOD and AC-related clauses on EM in Pakistan, which is missing in the relevant literature general and in Pakistan in particular.

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The Impact of Ownership Types on the Value of Discretionary Accruals: What Is the Role of Audit Committee? Evidence From Pakistan

Cited by 7 publications

References 39 publications

Board of directors and earnings manipulation: evidence from regulatory change

Board of directors and earnings manipulation: evidence from regulatory change

Market structure and determinants of the pricing of the fuelwood in the Bono region of Ghana

Corporate board, audit committee and earnings manipulation: does the corporate regulation matter? An emerging economy perspective

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