Dividend Policy, Corporate Governance and Earnings Quality: A Case of Non-Financial Listed Firms of Pakistan

Afzal, Tehmina; Siddiqui, Atif; Khan, Shiraz; Khan, Muhammad Kamran; Huseen, Nader

doi:10.18510/hssr.2021.9353

Cited by 3 publications

(5 citation statements)

References 31 publications

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“…Andriana et al (2021) also explored these factors' importance in predicting profit quality and found a positive correlation between higher-quality profits and profitability, scale, and investment prospects. Afzal et al (2021) found no significant impact of dividend policy on earnings quality. Compensation committee and audit quality positively affected earning quality but negatively affected earning management.…”

Section: Introductionmentioning

confidence: 86%

Impact of Profitability, Firm Size and Investment Opportunities on Earning Quality: Evidence from Pakistan

Hanif,

Alim,

Khan

et al. 2023

JAFEE

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Purpose: This study aimed to examine the impact of profitability, firm size, and investment opportunities on earning quality of companies in Pakistan. For this purpose, 100 non-financial companies were selected from the top industries of Pakistan registered on the Pakistan Stock Exchange from 2014 to 2021. This study has taken earning quality as a dependent variable, while profitability, firm size and investment opportunities are used as the independent variables. Design/ Methodology/ Approach: For the purpose of investigation, descriptive statistics are presented and the multi co-linearity test, Hausman test, and random effect regression model are conducted. A purposive sampling technique is used in this research. Findings: The research indicates that the profitability and investment opportunities have a significant and positive effect on earning quality of the companies. On the other side, the research demonstrated that the firm size has a significant negative effect on earning quality. The reason behind this relation is that the large-scale firms expands their discretionary accruals and manipulate the earnings as they want to show the healthy financial circumstances of the company in the market, so that they can attract investors. Therefore, by doing this manipulation, earning quality is impacted, which indicates the negative effect of firm size. Implications/ Originality/ Value: This study would help the investors and stakeholders to better understand the financial condition of the non-financial companies of Pakistan before investment. Depending upon all the results, it is recommended that all companies must improve their earning quality and present it without manipulation so that the investors and other stakeholders can make more investments and profits.

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Section: Introductionmentioning

confidence: 86%

Impact of Profitability, Firm Size and Investment Opportunities on Earning Quality: Evidence from Pakistan

Hanif,

Alim,

Khan

et al. 2023

JAFEE

View full text Add to dashboard Cite

show abstract

“…So the DP and EM are interrelated. However some authors elucidate no connection amongst EQ & dividends (Afzal et al, 2021;Grullon et al, 2005;Mousa & Desoky, 2019). The outcomes of their studies recommended that dividend do not forecast the future incomes of the corporations and have no connections with earning management.…”

Section: Dividend Policy and Earnings Qualitymentioning

confidence: 99%

“…But in developing economies, particularly Pakistan there is limited empirical evidence in this connection. Recently a research conducted in this regard elucidated that DP & EQ are not significantly related, however the attributes of corporate governance influences the earnings management practices (Afzal, Siddiqui, Khan, Khan, & Huseen, 2021).…”

Section: Introductionmentioning

confidence: 99%

Does Corporate Governance Moderate the Relationship between Dividend Policy and Earnings Quality: Evidence from Pakistan

Siddiqui¹,

Afzal²,

Azam³

et al. 2022

Int. j. bus. econ. aff.

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This endeavour aimed to empirically investigate the moderating role of the corporate governance characteristics (board size, board independence, board meetings, CEO duality, audit quality, nomination and remuneration committee) in the dividend policy and earnings quality nexus. The study was conducted on the data consisting of 145 non-financial companies listed on Pakistan Stock Exchange (PSX) with 1450 firm-year observations for the period 2010-2019. Earnings quality was assessed by the earnings management represented by discretionary accruals which were estimated by employing the Modified jones model (1995). Multiple Panel regression model was used for analysis. It was discovered that the board size, board meetings, CEO duality and audit quality moderate the relationship between the dividend policy and earnings quality. While the board independence, nomination committee and remuneration committee, were found to have no such influence. Overall the outcomes of this research work suggest that corporate governance mechanisms deserve the attention of all the financial statements users attempting to determine the earnings quality of firms.

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“…Therefore, the research earnings quality has always been highly discussed. From the perspective of external corporate governance, surplus management of listed companies in various countries is unique due to different legal environments and investor protection mechanism [15]. From the perspective of internal corporate governance, the higher the level of corporate governance, the higher the earnings quality [15,16].…”

Section: Literature Review Of Earnings Qualitymentioning

confidence: 99%

“…From the perspective of external corporate governance, surplus management of listed companies in various countries is unique due to different legal environments and investor protection mechanism [15]. From the perspective of internal corporate governance, the higher the level of corporate governance, the higher the earnings quality [15,16]. In addition, both non-executive directors and outside independent directors have the abilities to improve earnings quality [17].…”

Section: Literature Review Of Earnings Qualitymentioning

confidence: 99%

Audit Committee Chair’s Geographic Distance and Earnings Quality

Niu,

Lin,

Occeno

2023

E3S Web Conf.

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This paper empirically examines the relationship between the geographical distance of audit committee chairs(ACCs) and corporate earnings quality by taking A-share listed companies in Shanghai and Shenzhen from 2007 to 2018 as samples. It is found that the geographical distance between ACC’s work place and the operation place of listed companies can significantly reduce earnings quality, and the farther the geographical distance, the worse the earnings quality. In addition, the external audit conducted by the Big4 auditors can significantly suppress the impact of geographical distance on earnings quality. Further analysis found that there is a partial mediation effect in the quality of internal control. The research conclusions of this paper provide a new idea for for companies to appoint ACCs. The research on accounting and financial issues from the perspective of economic geography is refined to the field of audit committee, which enriches the research literature on factors influencing the functions of ACCs. It is of great significance to improve the performance of the committee, the long-term development of the company and the protection of investors’ interests.

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Dividend Policy, Corporate Governance and Earnings Quality: A Case of Non-Financial Listed Firms of Pakistan

Cited by 3 publications

References 31 publications

Impact of Profitability, Firm Size and Investment Opportunities on Earning Quality: Evidence from Pakistan

Impact of Profitability, Firm Size and Investment Opportunities on Earning Quality: Evidence from Pakistan

Does Corporate Governance Moderate the Relationship between Dividend Policy and Earnings Quality: Evidence from Pakistan

Audit Committee Chair’s Geographic Distance and Earnings Quality

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