Financial reporting quality for banks in Egypt and the UAE

Abstract

The purpose of this paper is to investigate the determinants of financial reporting quality for banks in Egypt and the UAE over the period 2008 to 2013. Multiple regression analysis is used to test the relationship between financial reporting quality as a dependent variable and certain independent variables. The results indicate that international financial reporting standards, global financial crisis, accounting conservatism, market structure in terms of concentration and intellectual capital performance for banks in Egypt and the UAE have a significant impact on financial reporting quality but bank size and market structure in terms of efficiency have not. These results might help the banking and accounting regulators to address the factors affecting financial reporting quality. In addition, it provides useful comparative information for investors and hence helps them to make informed decisions. It is one of a few studies which address the impact of the nature of accounting standards on financial reporting quality in emerging economies through investigating the impact of IFRS adopted by the UAE Banks and local accounting standards adopted by the Egyptian banks on financial reporting quality. In addition, the study, for the first time, is exploring whether intellectual capital performance may be an underlying determinant of financial reporting quality

CEO Power, Corporate Governance Mechanisms and Earnings Quality

“…The other view states that entrenched CEOs may destroy firms' values in the setting where the shareholders' protection laws are comparatively weaker, and the capital market cannot exert the required pressure to constrain CEOs from misuse of powers for their private gain. The weak external force allows entrenched CEOs to preserve their standing; they are more likely to decide their interests (Bear et al, 2010;El-Bannany, 2018;Hass et al, 2016;. Powerful CEOs make "CEOcentralised" choices.…”

“…Therefore, a CEO with substantial stock ownership in the focal firm is more likely to influence corporate board decisions making through their influential role power (El-Bannany, 2018;García-Meca & Sánchez-Ballesta, 2009;Hoang et al, 2017). Consequently, minority shareholders are less protected (Baker et al, 2019).…”

“…Further, they are also driven by the rule of law and ethics. So far, their involvement is related to better FREQ and less probability of a firm's level of financial fraud (Dah & Jizi, 2016;El-Bannany, 2018). Based on these viewpoints, it can be argued that their presence can limit the CEO's power and curtail or substitute the negative effects of CEO power dynamics on FREQ.…”

The Effects of International Financial Reporting Standard Adoption on Conservatism in Malaysian Banks

“…There have been scarce studies on conservatism and IFRS within financial institutions. In different institutional setting, studies of IFRS and conservatism has been conducted among the Nigerian Banks (Tanko, 2012) and in the context of banks in Egypt and the UAE over the period (El-Bannany, 2018. Both studies show a positive relation between conservatism and IFRS.…”