Impact of corporate governance on financial performance of sugar sector firms listed in Pakistan stock exchange

Khan, Muhammad Wasim; Saeed, Usman

doi:10.34091/ajss.12.2.10

Cited by 10 publications

(16 citation statements)

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“…The output indicates that all the identified corporate governance characteristics except board size and audit committee accounting expertise do not presenting a significant relationship with absolute discretionary accruals. These findings were rationalized getting support from the extant literature of previous studies (Chalaki et al, 2012;Khan et al, 2020;Madhurangi et al, 2021;Subhasinghe et al, 2021). Furthermore, it emphasizes the importance of the audit committee participants with membership in a recognized professional accounting body and sufficient finance and accounting literacy.…”

Section: Discussionsupporting

confidence: 76%

An Empirical Study on Corporate Governance and Financial Reporting Quality? Evidence From Listed Entities in Sri Lanka

NT¹,

YM²

2022

JRFS

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The concept of Corporate Governance (CG) has become a contemporary focus in both accounting and finance arenas .This plays a vital role, especially in the process of assuring financial reporting quality (FRQ). The purpose of this paper is to investigate the relationship between selected CG characteristics and the level of FRQ in Sri Lanka. The study was carried out using secondary data obtained through published annual reports from 209 companies listed in the Colombo Stock Exchange (CSE) during 2017 to 2020 including 836 firm year observations. Six selected CG characteristics (Board Size, Board Independence, CEO Duality, Audit Committee Size, Audit Committee Independence, and Audit Committee Accounting Expertise) and the level of FRQ has been evaluated by absolute value of discretionary accruals (ADA) using Panel linear regression analysis. It was found that, a significant positive relationship between the audit committee accounting expertise and FRQ, while a significant negative relationship was found between Board Size and FRQ. However the other remaining CG characteristics were not significantly influenced on the level of FRQ. Overall, this analysis highlights the importance of having a comparatively smaller board size and composition the members in the audit committee with financial and accounting background to enhance FRQ and transparency. The findings of this study expect to have a significant policy implication for policy makers and regulators in terms of formulating strategies and policies on CG best practices in Sri Lanka. Similarly, the entities should promote smaller board size and recruiting, especially majority of independent nonexecutive directors with sufficient accounting skills and financial experience with the aim of curtailing the adverse earnings management practices to improve FRQ.

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Section: Discussionsupporting

confidence: 76%

An Empirical Study on Corporate Governance and Financial Reporting Quality? Evidence From Listed Entities in Sri Lanka

NT¹,

YM²

2022

JRFS

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“…Hence, it does not support the hypotheses. These findings are similar to Hasan et al (2020), Majiyebo et al (2018), Adewale and Babajide (2019), Khan, Rehman, Zeeshan, and Afridi (2020), Subhasinghe andKehelwalatenna (2021), Chalaki et al (2012), Shah et al (2019), and Uwuigbe et al (2018). In relation to the control variables, firm size shows a significant negative correlation with a -0.086 value of coefficient (p=0.0370) whereas, leverage represents a significant positive correlation with a 0.095 coefficient (p=0.0000).…”

Section: Regression Analysissupporting

confidence: 79%

“…The output indicates that all the identified corporate governance characteristics except board size and audit committee accounting expertise do not present a significant relationship with absolute discretionary accruals. These findings were rationalized by getting support from the extant literature of previous studies (Chalaki et al, 2012;Khan et al, 2020;Madhurangi et al, 2021;Subhasinghe et al, 2021). Furthermore, it emphasizes the importance of the audit committee participants with membership in a recognized professional accounting body and sufficient finance and accounting literacy.…”

Section: Discussionsupporting

confidence: 58%

Does Corporate Governance Affect Financial Reporting Quality? Evidence from Listed Entities in Sri Lanka

Hewage

Amarasekara

2022

S. Asian J. Bus. Insights

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The purpose of this paper is to investigate the relationship between selected CG characteristics and the level of FRQ in Sri Lanka. The study was carried out using secondary data obtained through published annual reports from 209 companies listed in the Colombo Stock Exchange (CSE) from 2017 to 2020 including 836 firm-year observations. Six selected CG characteristics (Board Size, Board Independence, CEO Duality, Audit Committee Size, Audit Committee Independence, and Audit Committee Accounting Expertise) and the level of FRQ has been evaluated by the absolute value of discretionary accruals (ADA) using Panel linear regression analysis. It was found that a significant positive relationship between the audit committee accounting expertise and FRQ, while a significant negative relationship was found between Board Size and FRQ. However, the other remaining CG characteristics did not significantly influence the level of FRQ. Overall, this analysis highlights the importance of having a comparatively smaller board size and composition of the members in the audit committee with financial and accounting backgrounds to enhance FRQ and transparency. The findings of this study expect to have a significant policy implication for policymakers and regulators in terms of formulating strategies and policies on CG best practices in Sri Lanka. Similarly, the entities should promote smaller board size and recruiting, especially the majority of independent nonexecutive directors with sufficient accounting skills and financial experience to curtail the adverse earnings management practices to improve FRQ.

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“…The researcher has used CG as an aggregate of ownership structure and board structure proxies. Moreover, the researcher in the Pakistani context linked CG with firm performance in 22 studies but the findings are inconclusive [20,70,82,124], with EM in 13 studies [19,65,66,73,107,122], with firm risk in 5 studies [35,98,136,[143][144][145], with Cash Holding in 4 studies, [24,25,116], with CSR in 3 studies [46,51,110] and with other topics in 18 studies [16,26,31,36,71,79,99,108,115].…”

Section: Corporate Governance and Related Studiesmentioning

confidence: 99%

“…Since the incorporation and promulgation of the CCG in 2002 in Pakistan, a new trend of research started in Pakistan and many researchers in Pakistan researched the topic of CG-related variables with firm financial performance [14,20,38,47,71,78,82,94,121,124,147,148,153], firm value [49,90,92,104,112,135,138,150,155], cost of capital [54,61,62,64,102,122,137], investment efficiency [129], cash holding [25,77,116,146], related party transactions [34],56, 57, 141-145, accounting conservatism [111], disclosure and audit quality [102,105,111,140], earnings quality [90,92,119], dividend policy [20,23,30,…”

Section: Introductionmentioning

confidence: 99%

Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda

et al. 2022

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The basic aim of this paper is to systematically review the corporate governance research trends in Pakistan and to give directions for future researchers in this field. The methodology adopted in this paper is “Systematic Literature Review,” 108 papers have been used from the period 2002–2020 along with 17 research theses in this study. The findings of this study show two trends in corporate governance research first one form 2008 to 2016 and the second one is from 2017 to 2020. The first trend shows that corporate governance (variables) is linked with traditional topics such as firm performance, dividend policy, capital structure, cost of capital and earnings management. The theory which is mostly used in the first corporate governance trend is the agency theory. In the second trend, corporate governance (variables) are linked with multiple issues while taking various theoretical perspectives such as risk taking, tunneling, CSR, investment portfolios, board-related issues, financial distress and much more. This paper has identified and filled the research gap by writing a comprehensive review paper of the prevailing corporate governance literature and has given directions for future researchers to consider it. To the best of researchers’ knowledge, this is the first study that has systematically reviewed and synthesized the corporate governance literature by adopting the systematic literature review methodology in Pakistan an emerging economy. It is an extensive effort for the purpose to encourage the interested researchers/scholars to add and expand their contributions to the corporate governance literature in Pakistan on the potentially identified areas of corporate governance.

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Impact of corporate governance on financial performance of sugar sector firms listed in Pakistan stock exchange

Cited by 10 publications

References 0 publications

An Empirical Study on Corporate Governance and Financial Reporting Quality? Evidence From Listed Entities in Sri Lanka

An Empirical Study on Corporate Governance and Financial Reporting Quality? Evidence From Listed Entities in Sri Lanka

Does Corporate Governance Affect Financial Reporting Quality? Evidence from Listed Entities in Sri Lanka

Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda

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