The Influence of Internal Governance Mechanisms on Accounting Conservatism

Yunos, Rahimah Mohamed; Ahmad, Syahrul Ahmar; Sulaiman, Normala

doi:10.1016/j.sbspro.2014.11.138

Cited by 38 publications

(49 citation statements)

References 40 publications

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“…If the audit committee is independent, and work of the committee fair, then frauds occurring in firms could be curbed (Yunos et al, 2014). Independent members of the committee could fairly look into financial statements and observe components such as equity, net income, total assets and sales, which represent the performance and financial position of the firm (Subrata Sarkar, 2013).…”

Section: Audit Committee Meetings and Firm Performancementioning

confidence: 99%

“…Had audit committee comprised greater number of independent directors, the financial accounts might not have been manipulated for so long. Yunos et al (2014) stressed on frequent meetings of the audit committee for it to be more effective. While significant studies have been carried out on corporate governance and its association with a firm's financial performance (Mishra & Mohanty, 2014;Rodriguez-Fernandez et al, 2014;Velnampy, 2013), very few have considered the role of audit committees.…”

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confidence: 99%

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Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India

Bansal¹,

Sharma²

2016

IJEF

123

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Considering the endorsement of Indian Companies Act (2013), the study examines the role of audit committee characteristics (independence and frequency of meetings) in addition with other components of corporate governance (duality, promoter shareholding, board composition, and board size) in improving firm performance. Fixed effect panel data regression was applied on 235 non-financial public limited companies listed in NSE 500. The time period considered was ten years (2004 to 2013). Return on Assets, Return on Equity, Tobin's q and Market Capitalization were used as proxy of firm performance. Results reveal significant positive association of board size and CEO-Chairman dual role with firm performance. However, findings did not reveal any additional effect of audit committee independence and its meeting frequency on the financial performance of Indian firms. Regulators and policy makers may reexamine the significance of greater independence of board and audit committee in context of firm performance.

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Section: Audit Committee Meetings and Firm Performancementioning

confidence: 99%

mentioning

confidence: 99%

Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India

Bansal¹,

Sharma²

2016

IJEF

123

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“…It is believed that the investors' trust and confidence come along with the presence of independent and qualified audit committee (Leung, Richardson, & Jaggi, 2014). In addition, the financial frauds occur due to the small number of independent audit committee (Bhasin, 2013) and the minimum number of audit committee meeting (Yunos, Ahmad, & Sulaiman, 2014).…”

Section: Introductionmentioning

confidence: 99%

Committee on board: Does it matter? A study of Indonesian Sharia-listed firms

Fauzi

Basyith

Foo

2017

Cogent Economics & Finance

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Abstract:The committee on board includes audit committee and nomination committee that currently has been questioned as to whether the firm value is also affected by the committees' performance that has been the subject of attention. Apparently, this study is the first to attempt providing an evidence of committees' role on to the extent of its contribution to firm value in the context of Indonesian Sharia-listed firms as the establishment of Islamic-compliance firms is currently experiencing an upward trend in many countries. Hence it is enticing to examine the impact of committee on board as part of corporate governance mechanisms on firm value in the Indonesian Sharia-listed firms. Using an Indonesian Sharia-listed firms which counts for 30 firms in the quarterly period of 2009 to 2015, this study employs a 720 balanced panel, using Generalized Least Square. The results reveal that the audit committee and the nomination committee have a significant impact on firm value (Tobin's Q). The non-significant result for ROA suggesting that the mixed measured of book and market is viewed more reliable for investors as it indicates the overall performance measure. Meanwhile the result of the number of audit committee meeting yielded no significant impact on firm value; this may be due to no restrictions on the number of positions of audit committee serves in firms, therefore,

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“…Yunos et al. () find that Malaysian boards with more independent directors maintaining financial expertise are faster in recognising bad news in comparison to good news. Nevertheless, their results are not significant when they measure the expertise in audit committees.…”

Section: Background and Hypotheses Developmentmentioning

confidence: 99%

“…Yunos et al. () show that a superior proportion of independent directors and financial expertise leads to a faster recognition of bad news relative to good news. Thus, in biotech firms, we expect that support specialists will provide firms with specific knowledge and skills in the industry, which can help with evaluating the many aspects of legal implications (lawsuits) and improving the quality of information available to the board.…”

Section: Background and Hypotheses Developmentmentioning

confidence: 99%

Board Composition and Accounting Conservatism: The Role of Business Experts, Support Specialist and Community Influentials

Enache

García‐Meca

2018

Australian Accounting Review

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In this study, we examine the relationship between accounting conservatism and board composition. We categorise outside directors according to their skills, abilities, connections and knowledge in three different categories: business experts, support specialists and community influentials. We address three main questions: Is the financial and accounting expertise of directors relevant to improving accounting conservatism? Does specialised expertise in the board affect the speed at which news is reflected in earnings? And how do the political ties of directors affect the sensitivity of earnings to bad news? Our sample consists of active US biotech firms publicly traded on the NYSE, AMEX and NASDAQ stock exchanges during the 2005–2013 period. Our study confirms that not all outside directors are equally effective in monitoring and contracting and that certain kinds of outside directors, such as politicians, can even lower the sensitivity of earnings to bad news. Our robustness analysis confirms that these results are not conditional on the accounting measure, and suggest that distinguishing directors according to their skills and abilities is crucial to understanding the way in which firm boards affect conservatism.

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The Influence of Internal Governance Mechanisms on Accounting Conservatism

Cited by 38 publications

References 40 publications

Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India

Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India

Committee on board: Does it matter? A study of Indonesian Sharia-listed firms

Board Composition and Accounting Conservatism: The Role of Business Experts, Support Specialist and Community Influentials

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