The Effects of 2011 Revised Code of Corporate Governance on Financial Reporting Quality in Nigeria: The Role of Board of Directors and Audit Committee Members

2021 ◽  
Vol 27 (02) ◽  
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Code Of Corporate Governance

Enhancing Financial Reporting Quality through Corporate Ethics Commitment

2021 ◽  
Vol 6 (2) ◽  
pp. 84-94
Author(s):  
Noorul Azwin Md Nasir ◽  
Hafiza Aishah Hashim ◽  
Noorshella Che Nawi ◽  
Mohd Nor Hakimin Yusoff ◽  
Nur Athirah Mohd Aluwi
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Code Of Ethics ◽  
Reporting Quality ◽  
Jel Classification ◽  
Financial Reporting Quality ◽  
Corporate Ethics ◽  
Financial Statement Fraud ◽  
Code Of Corporate Governance

Objective - A rising number of cases involving ethical misconduct within firms have of late received considerable attention in Malaysia. Despite the country's declaring having a strong corporate governance policy, strengthened through the Code of Ethics for Company Directors and Malaysia Code of Corporate Governance, unethical practices, and lack of integrity within firms remain an issue. This paper aims to review the current implementation of corporate ethical conducts among corporate governance practitioners as well as factors that influence corporate ethics commitment in a firm. Methodology/Technique - This paper is developed from extensive readings of previous literature on corporate governance practices and their effect on the quality of financial reports. Findings - This paper discloses collective approaches of corporate ethics practiced in Malaysian firms and how the implementation has enhanced the firms' overall financial reporting quality. It demonstrates current issues and the importance of corporate ethics commitment to enhance financial reporting quality. Firms that emphasize ethical commitments, reduce the risk of financial statement fraud and firms will naturally gain trust from their stakeholders. Novelty - This paper stresses the importance of sound ethical conduct above other factors that influence the financial reporting quality of firms in Malaysia. This paper is the result of extensive research on corporate ethics commitment and financial reporting quality. Type of Paper - Review. Keywords: Corporate Ethics; Corporate Governance; Financial Reporting Quality JEL Classification: G34, M41.

scholarly journals The impact of corporate governance mechanisms and IFRS on earning management in Saudi Arabia

Accounting ◽  
2021 ◽  
pp. 207-224
Author(s):  
Abdulwahid A. Hashed ◽  
Faozi A. Almaqtari
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Earning Management ◽  
Negative Effects ◽  
Corporate Governance Mechanisms ◽  
Positive Effect

The current research seeks to assess the influence of corporate governance mechanisms and IFRS adoption on compliance with IFRS, earning management, and financial reporting quality(FRQ). A sample comprises 102 Saudi listed firms for the period spanning from 2014 up to 2019 was used. The study used descriptive statistics, correlation analysis and multivariate analysis to estimate the results. The results reveal that while board size, board meeting and foreign ownership had negative effects on compliance with IFRS, board and audit committee independence exhibited a positive effect. Further, the results demonstrate that there was a sign of earning management under IFRS when a performance magnitude was used. The results also indicate that board and audit committee size, audit committee meeting and managerial ownership had significant negative effects on financial reporting quality however, board and audit committee independence showed a significant positive effect. Importantly, the results found that FRQ under IFRS was better than Saudi GAAP. The present research provides practical implications for policy makers, stock market authority, and academicians. More regulatory and disclosure requirements have to be imposed and financial reporting supervisory board need to be formed. The present research provides a novel contribution to IFRS compliance, earning management, financial reporting quality and corporate governance literature. It has a unique contribution as it attempts to investigate this issue in the context of an emerging economy and a recent IFRS adopter; Saudi Arabia that has special country-specific characteristics. The study also provides an evidence by investigating earning management and financial reporting quality under both sets of accounting standards; IFRS and Saudi GAAP.

scholarly journals The Triangle Defense for Financial Reporting Quality: The Interplay between Internal Auditing, the Audit Committee, and the External Auditor

Wahana ◽  
2020 ◽  
Vol 23 (1) ◽  
pp. 112-130
Author(s):  
Djoko Susanto
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Academic Research ◽  
Internal Audit ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Working Relationships ◽  
External Auditors ◽  
External Auditor

The internal audit function, audit committee, and external auditor are three crucial stakeholders of corporate governance that safeguard the quality of financial reporting. In this article, I discuss the interrelationships between these monitoring mechanisms. I also provide insights about what we have learned from academic research about the working relationships between these three governance entities. This article should be of interest to academic researchers as well as to corporate stakeholders, which include management, investors, regulators, and Dewan Komisaris members. Future researchers can make use of this article as they contribute more work in areas related to auditing, monitoring and corporate governance, and financial reporting quality. Insights from this article can also guide corporate stakeholders to assess the effectiveness of the internal audit, audit committee, and external auditors in their organizations.

scholarly journals The impact of good corporate governance practices on financial reporting quality: Empirical evidence from Jordanian listed companies

2012 ◽  
Vol 9 (4) ◽  
pp. 178-186 ◽  
Author(s):  
Khaled Erieg Abu-Risheh ◽  
Mo’taz Amin Al-Sa’eed
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Relationship

The main objective of this paper is to analyze the relationship between the good corporate governance practices on the financial reporting quality of Jordanian listed companies. Specifically, we focus on the board’s independence, board’s transparency, and separate audit committee. A listing of Share -Traded Jordanian Companies was available from the Amman Stock Exchange as of 31 December 2011. A total of (167) company shares were traded as of 31 of December 2011. It was decided to distribute (160) questionnaires to the related external auditors, the expertise members of the Audit Committees, and the Jordanian regulatory bodies that oversight the corporate reporting of those companies, which include the Jordanian Securities Commission, Insurance Commission, and Central Bank of Jordan. The empirical study is realized based on a sample of the companies listed on the Amman Stock Exchange. Our research results shows that the good corporate governance practices impact the financial reporting quality, were Independence is considered one of the determinants of the success of financial reporting quality (T = 3.709, 008) and (R= 0.676), in addition to that; the independent variables are able to explain the variance in the dependent variable, a multiple regression test was carried out to test the relationship between board of directors’ transparency, board of directors’ independence, and audit committees, and financial reporting quality (FRQ), they are able to explain nearly 0.805% (R=0.805% P< 0.000) of the variance in financial reporting quality. The correlation analysis allows testing the strength of relationships between several independent variables and one dependent variable, which is the case in this study. The results of correlation analysis shows that the relationships between boards of directors’ transparency, board of directors’ independence, and separate audit committees, and the dependent variable which is financial reporting quality (FRQ), are significant.

scholarly journals Determinants of financial reporting quality and its implications on the financial performance of state-owned enterprises (SOEs)

2016 ◽  
Vol 6 (4) ◽  
pp. 521-530
Author(s):  
Evada Dewata ◽  
Hamdy Hadi ◽  
Hadi Jauhari
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Audit Committee ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Government Ownership ◽  
Board Of Director ◽  
The Board Of Directors

This research aimed at analyzing the influence of the size of the board of directors, the composition of the independent commissioners, the effectiveness of audit committee and government ownership of the financial reporting quality and its implications on the financial performance of state-owned enterprises. Research population is state-owned enterprises listed on the Indonesia Stock Exchange from 2010-2014. There were 50 companies assigned as the sample of this research by using purposive sampling method. The results showed that partially, the size of the board of director, the composition of the independent commissioners and government ownership did not have the significant influence on financial reporting quality. The effectiveness of audit committee positively and significantly influenced financial reporting quality. The size of the board of directors, the effectiveness of the audit committee and financial reporting quality positively and significantly influenced financial performance. The composition of an independent commissioner and government ownership negatively and significantly influenced financial performance

scholarly journals The Impact of Audit Committee Performance and Composition on Financial Reporting Quality in Jordan

2021 ◽  
Vol 12 (3) ◽  
pp. 55
Author(s):  
Qasim Ahmad Alawaqleh ◽  
Nashat Almasri
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Work Performance ◽  
Stock Exchange ◽  
Internal Audit ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Governance System ◽  
The Impact

The corporate governance literature indicates efforts to investigate the role of the audit committee (AC) in improving the financial reporting quality (FRQ) after the emergence of financial scandals in many countries in the world, inclusive Jordan. To date, empirical findings are inconclusive enough to address all audit committee characteristics regarding its competency and responsibilities by employing a questionnaire to collect data about this relationship. Thus, this study measures the correlation between AC (performance and composition) and FRQ of manufacturing corporations registered on the Amman Stock Exchange (ASE). To test this impact empirically, the target population was financial managers, audit committee members, and internal audit managers who are working in manufacturing corporations listed on the (ASE). According to the coefficient (β), the independent variables (Audit Committee Performance and Audit Committee Composition influence the dependent variable FRQ. This research recommends that firms enhance the audit committee work performance and composition to ensure audit committee members effectively enhance the FRQ audit committee is a vital mechanism of the firm's corporate governance system.

AUDIT COMMITTEE AND AUDIT CHANGE: EMPIRICAL EVIDENCE FROM THE EMERGING MARKET

2012 ◽  
Author(s):  
Zaitul Zaitul
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Practical Implication ◽  
Emerging Market ◽  
Reporting Quality ◽  
Theoretical Implication ◽  
Financial Reporting Quality ◽  
Financial Expertise ◽  
The Relationship

This study aims to investigate the relationship between audit committee and audit change in listed Indonesia Company. We use four variables for audit committee that is independence, size, financial expertise and activity. Besides, this study also uses three control variables (ROA, LEV, and SIZE). By using the Binary Logic Model (BLM) with panel data for 654 observation, we find that all hypotheses are rejected which means that there is no role of audit committee in determining the audit change. However, big and company with the higher leverage is less likely to change audit, firm. This finding has a practical and theoretical implication. For practical implication, regulator or government agent can increase the financial reporting quality by improving the role of audit committee by changing related mechanism.

scholarly journals Corporate Governance and Financial Reporting Quality in Selected Nigerian Company

2014 ◽  
Vol 2 (3) ◽  
pp. 7-16
Author(s):  
Onuorah Anastasia Chi-Chi (PhD) ◽  
Imene Oghenefegha Friday
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Discretionary Accruals ◽  
Financial Reporting Quality ◽  
Board Structure ◽  
Quality Audit

This paper evaluated the level of performance of some selected companies ranging from commodities, brewery, banking, oil and gas and beverages in terms of corporate governance measure indictors on the firm quality of financial reporting in Nigeria. The data were collected from 2006 to 2015. Econometric analysis were conducted and the result suggests that the correlation among corporate governance indicators of board structure (size-BRDSZ and independence-BRDID), audit quality (audit committee size (ADCMZ), the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4), board experience (i.e. experience-BRDEX) and financial reporting quality is 93.47%. The independent variables can explain the variation in the FRQDA by 54.29%. There is overall significance among the parameters measuring financial reporting quality as discretionary accruals of firm (FRQDA). Board structure (size-BRDSZ), board experience (experience-BRDEX) and the quality of external audit (EADTQ) have positive impact on the financial reporting quality measured by the discretionary accruals of firm (FRQDA) by 16.01, 0.05 and 2.75. However, independent directors on the board of firm (independence-BRDID) and audit quality (audit committee size (ADCMZ) negatively affect financial reporting quality measured by the discretionary accruals of firm (FRQDA) as much as 0.99 and 20.01. Guarantee Trust Bank Plc. among the five selected companies of study in Nigeria has better performance of financial reporting based on board structure (size-BRDSZ) and audit committee size (ADCMZ). This revealed that there is short run relationship among Audit quality (audit committee size (ADCMZ), and the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4) and board experience (i.e. experience-BRDEX) have not granger cause FRQDA. It further recommended that greater focus on corporate governance indicators so as to bring about global standard financial reporting in the Nigerian emerging market for investment opportunity.

scholarly journals The effect of audit committee characteristics on financial reporting quality: The moderating role of audit quality in the Netherlands

2021 ◽  
Vol 18 (3) ◽  
pp. 19-30 ◽  
Author(s):  
Sana Mardessi Masmoudi
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Ordinary Least Squares ◽  
Real Earnings Management ◽  
Financial Reporting Quality ◽  
Moderating Role

The purposes of this study are to shed light, on the one hand, on the effect of audit committee characteristics, namely independent members in audit committee, a financial expert in audit committee, frequency of meetings and audit committee size on financial reporting quality proxied by real earnings management. On the other hand, it aims to investigate the moderating role of audit quality in the relationship between audit committee characteristics and financial reporting quality. The objective is to contribute to the new evidence on the role of audit committee characteristics towards the financial reporting quality with audit quality as a moderator, particularly the appointment of Big 4 company. This study uses the ordinary least squares (OLS) regression to achieve the research purpose by evaluating the data collected from 90 public listed companies from 2010 to 2019 in the Dutch context. The results state that audit committee characteristics have a statistically significant relationship with real earnings management. However, the effect of audit committee meetings on abnormal operating cash flow and discretionary expenses is not significant. There is also evidence that audit quality positively moderates the audit committee and real earnings management links. Lastly, the findings of this study will help professional accountancy bodies and governments to highlight the relevance of earnings management in safeguarding trustworthy financial information, owners’ wealth and to enhance audit committee characteristics in improving audit quality, especially after the enforcement of the Dutch Corporate Governance Code in 2016.

scholarly journals Firm Characteristics and Financial Reporting Quality: The Moderating Role of Malaysian Corporate Governance Index

2018 ◽  
pp. 924-932
Author(s):  
Rokiah Ishak ◽  
Noor Afza Amran ◽  
Kamarul Bahrain Abdul Manaf
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Cash Flow ◽  
Financial Reporting ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Large Firms ◽  
Firm Characteristics ◽  
Big 4

The principle role of financial reporting is to provide investors with useful information for investment decision makings. In this study, we examine whether corporate governance moderates the relationship between firm characteristics and financial reporting quality. We use earnings management as measure for financial reporting quality. This study uses secondary data obtained from Thompson Database. The sample of this study is firms listed on the Main Market of Bursa Malaysia from 2012 to 2015. The results of our study reveal that there is a positive value of abnormal cash flow which indicates that companies do practice earnings management through manipulation of cash flow from operations. Large firms are practicing earnings management. Factors such as many business segments and business complexity have encouraged large firms to manage their earnings by manipulating their cash flow from operation. In contrast, firms with high leverage and firms audited by Big 4 are less likely to involve with earnings management. Interestingly, when corporate governance index is used as moderating variable, our result shows that only firms audited by Big 4 are related to earnings management. In terms of the contribution of the study, this study is important for the development of Malaysian capital market and it help investors to better understand how the impact of corporate governance mechanisms on financial reporting quality varies across firms.

Sign in / Sign up

Export Citation Format

Share Document