Board independence, earnings management and the moderating effect of family ownership in Jordan

Idris, Mohammed; Siam, Yousef Abu; Nassar, Mahmoud

doi:10.2478/mmcks-2018-0017

Cited by 37 publications

(46 citation statements)

References 28 publications

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“…The results of this study are consistent with research by Dowlatabadi & Filsaraei (2016), Abbadi et al (2016), Idris et al (2018) stated that independent commissioners have a significant negative effect on earnings management. Idris et al (2018) stated that independent commissioners can act as mediators in disputes that occur between managers and overseer management policies and provide management advice. Independent commissioners are in the best position to carry out monitoring functions in order to achieve good corporate governance.…”

Section: The Effect Of Good Corporate Governance Mechanisms On Earninsupporting

confidence: 92%

“…Abbadi, Hijazi, & Al-Rahahleh (2016) found that earnings management practices in companies could be reduced by the existence of an independent board of commissioners who had a higher percentage. Idris, Mohammed, Siam, & Nassar (2018) stated that in preventing earnings management practices, the effectiveness of the board of commissioners in overseeing management can be improved by the inclusion of commissioners from outside the company. Patrick et al, (2015) investigated the relationship of audit committees who were experts in finance and earnings management.…”

Section: The Effect Of Good Corporate Governance Mechanisms On Earninmentioning

confidence: 99%

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The Effectiveness of Corporate Governance in Constraining Fraud: Evidence from Listed Manufacturing Firms in Indonesia

Wati¹,

Anugerah²,

Ratnawati³

2020

JAROE

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Objective – The purpose of this study is to examine the direct effect of good corporate governance mechanisms on financial statement fraud with earnings management as a mediating variable.Design/methodology – This study used secondary data from manufacturing companies listed on the Indonesia Stock Exchange for the 2013-2017 period. The sample was determined using the purposive sampling method and was chosen based on certain considerations or criteria. The data in this study was analyzed using partial least square and performed with WarpPLS 5.0 software.Results – The results of this study prove that the mechanism of good corporate governance has a negative effect on financial statement fraud and earnings management. Earnings management can affect the effectiveness of good corporate governance mechanisms on financial statement fraud.Research limitations/implications - This research promotes the need for a company to inspect and maintain the importance of good corporate governance to avoid earnings management and fraud practices. From this research, investors can identify which companies apply good corporate governance in their company activities and systems.

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Section: The Effect Of Good Corporate Governance Mechanisms On Earninsupporting

confidence: 92%

Section: The Effect Of Good Corporate Governance Mechanisms On Earninmentioning

confidence: 99%

The Effectiveness of Corporate Governance in Constraining Fraud: Evidence from Listed Manufacturing Firms in Indonesia

Wati¹,

Anugerah²,

Ratnawati³

2020

JAROE

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“…The result of the correlation for the variables is shown in Table 5. According to Idris, Siam and Nassar, the general rule of thumb is that if a simple correlation coefficient between two regressors is greater than 0.8, then multicollinearity is a serious issue [98]. The correlations are quite low, generally below 0.3 except for a loss, which is correlated at 0.31% with 0.01% level of significant in a positive direction.…”

Section: Analysis Of Logistic Regression: Correlation Analysis (Pearsmentioning

confidence: 99%

Impact of Ownership Characteristics on Modified Audit Opinion in Jordan

Alkilani¹,

Hussin²,

Salim³

2019

IJAFRM

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It is well established that ownership characteristics are impacted by the quality of financial reporting. The purpose of this work is to examine the role of ownership characteristics in minimising the prospect of corporates obtaining a modified audit opinion in Jordan. Three ownership characteristics [family ownership (FAOWN), institutional ownership (INOWN) and foreign ownership (FAOWN)] and modified audit opinion were studied. The study used 117 samples of corporates listed on the Amman Stock Exchange (ASE). Logistic regression was employed to analyse the association between the modified audit opinions as a dependent variable and ownership characteristics as independent variables. Ownership characteristics are anticipated to be more successful in improving the quality of financial statement, and thus, reduce the prospect of firm obtaining a modified audit opinion. The analysed results from 2012 to 2016 periods of these corporates in Jordan showed that FAOWN and FOOWN validated this projection. Interestingly, the effect of family and FOOWN improve the quality of financial statement, thereby, reduce the cases of a modified audit opinion. Additionally, the study could not find any association impact between the INOWN and modified audit opinion.

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“…FOC is the ratio of family members to total number of directors on the board (Hashim, 2011). Prior studies find that FOC has a moderating influence on the association between board independence, AC independence, and EM (e.g., Jaggi et al, 2009;Idris et al, 2018a).…”

Section: Independent Variablesmentioning

confidence: 99%

The Moderating Role of Family Control on the Relationship between Audit Committee Financial Expertise and Earnings Management

Siam¹,

Idris²,

Okdeh³

2018

IJBM

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The current study offers empirical evidence on the way the family ownership moderates the association that exists between the financial experience of the audit committee and earnings management based on a sample of 44 manufacturing firms that are registered with the Amman Stock Exchange (ASE) from 2012 to 2016. From the results of the study, there is a significant negative association between the financial experience of the audit committee and earnings management. In addition, the study shows a positive interaction of the financial experience of the audit committee and the family ownership on earnings management. This indicates that an increase in the percentage of audit committee members having financial expertise, in order to restrict earnings management, is less likely to be influential in the case of family controlled firms. These results have implications for policy makers and regulatory bodies in Jordan since they highlight the need to improve the good corporate governance practices and attempt to constrain the incidence of earnings management in Jordanian firms.

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Board independence, earnings management and the moderating effect of family ownership in Jordan

Cited by 37 publications

References 28 publications

The Effectiveness of Corporate Governance in Constraining Fraud: Evidence from Listed Manufacturing Firms in Indonesia

The Effectiveness of Corporate Governance in Constraining Fraud: Evidence from Listed Manufacturing Firms in Indonesia

Impact of Ownership Characteristics on Modified Audit Opinion in Jordan

The Moderating Role of Family Control on the Relationship between Audit Committee Financial Expertise and Earnings Management

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