Longitudinal approach to the study of corporate governance code and earnings management relationship: the case of Saudi Arabia

Grada, Mohieddin

doi:10.1108/jaee-02-2021-0052

Cited by 6 publications

(4 citation statements)

References 95 publications

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“…In response, this study revealed that CG diffusion process in developing countries is “indisputably a political process and … involves the contest for power” (Hancher and Moran, 1989, p. 4). This study, by mobilising the concept of regulatory space, provided insights into how the CG regulatory agenda was initiated and how the power, interests and the dynamic political interactions of the influential actors influenced the development and implementation of CG codes in the context of developing countries (Grada, 2022).…”

Section: Discussionmentioning

confidence: 99%

Corporate governance regulation in regulatory space of a developing country: actors, strategies and outcomes

Ahmad

Mahmood

2023

JAEE

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PurposeThis study seeks to deepen the understanding of the political process underlying the establishment and evolution of corporate governance (CG) regulations in a developing country.Design/methodology/approachDrawing on regulatory space concept (Hancher and Moran, 1989) and Oliver's (1991) typology of strategic responses, the authors identify which actor participated in and benefitted from the establishment of a new transnational CG regulation in Pakistan. Data were collected through interviews and from the published secondary sources.FindingsThe findings highlighted regulations are being influenced and shaped up by the political process of negotiation, bargaining, manipulation and domination between powerful and resourceful actors in a given regulatory space. National regulators and regulatees can be indeed fervent opponents to the transnational regulations when it comes to protecting their well-rooted national interests.Originality/valueThis study contributes to the accounting literature by illustrating political processes through which internationally recognised CG practices are resisted, negotiated and implemented in the developing countries. The regulator must pay attention that the outcome of the regulatory change process is the result of carefully crafted and conscious strategies of actors in the regulatory space.

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Section: Discussionmentioning

confidence: 99%

Corporate governance regulation in regulatory space of a developing country: actors, strategies and outcomes

Ahmad

Mahmood

2023

JAEE

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“…The proxy statement should document the board IT committee [4]. In accordance with Grada [108], this research incorporated three additional corporate board characteristics into the study model: size, independence, and director share ownership. As per Fama and Jensen [39], corporate board size should be determined by the complexity of a company.…”

Section: H3mentioning

confidence: 99%

“…In accordance with prior research and the literature on corporate performance and EM, the financial sector was excluded due to its controlled financial reporting, namely in its recording and calculation of accrual-based earnings [108,120]. Moreover, companies with missing financial and/or governance data were excluded.…”

Section: Data and Sample Selectionmentioning

confidence: 99%

“…Such agency costs may inhibit depicting the true value of a firm [125]. In a recent CG study conducted in Saudi Arabia, Grada [108] employed firm size and financial leverage as control variables. Therefore, a company's financial condition is controlled by including its size and financial leverage (total debt/total assets).…”

Section: Independent and Control Variablesmentioning

confidence: 99%

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Information Technology Governance and Corporate Boards’ Relationship with Companies’ Performance and Earnings Management: A Longitudinal Approach

Singh

Alhulail

2023

Sustainability

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In accordance with the segregation of oversight from management decision making, the board-level information technology governance is accountable for supervising managerial IT activities. This research empirically analyzes the impact of board-level IT governance on the performance and earnings management practices of Saudi Arabian stock exchange (Tadawul)-listed companies between 2008 and 2020. The study sample includes cross-sectional time-series data from 154 firms with 18,018 firm-year observations. This study used regression analysis and other econometric models to examine probable endogeneities. The findings show that only the return on assets’ operational performance is positively and significantly related to board-level IT governance among the three performance metrics (return on assets, return on equity, and Tobin’s Q). This indicates that a higher proportion of members with IT experience and the presence of a board-level IT professional as chief information officer/chief technology officer and an IT committee positively impact operational performance. Finally, board-level IT governance competence and other governance attributes do not deter earnings management practices. Therefore, countries like Saudi Arabia should enhance their corporate governance environment considering the increasing significance of IT governance (control, service, and monitoring). There is also a need to review provisions of the Saudi Arabia Corporate Governance Regulations, especially for board composition, the appointment of independent and IT-literate directors, and penalties for non-compliance with regulations.

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Does the board of directors play a role in mitigating real and accrual-based earnings management in the MENA context?

Almarayeh,

Aibar-Guzman,

Suárez-Fernández

2024

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Purpose In light of the key role attributed to the board of directors as a monitoring tool to constrain earnings management practices, this study aims to examine the effect of some board attributes on accrual-based earnings management and real earnings management in the Middle Eastern and North African (MENA) context, whose institutional, economic and legal environment is markedly different from that of most organization for economic cooperation and development countries. Design/methodology/approach The authors selected a sample of 161 nonfinancial companies from nine MENA countries between 2014 and 2021 (corresponding to an unbalanced data panel of 486 observations). The authors used the generalized least squares regression test to examine the relationship between board attributes and earnings management. Findings The authors found that three board attributes (size, independence and gender diversity) have no effect on both types of earnings management practices, while CEO duality has no effect on accrual-based earnings management but has a significant and negative effect on real earnings management. Overall, the results suggest that most board attributes do not play a crucial role in reducing earnings management. Research limitations/implications The results provide valuable insights into the universal role of corporate governance mechanisms and raise questions about the role of the board of directors in improving reporting quality in the MENA context. Practical implications Regulators should adapt corporate governance mechanisms to the characteristics of the institutional context in which they are inserted. Originality/value To the best of the authors’ knowledge, this study is the first to examine the effect of various board characteristics on both types of earnings management practices in the MENA context. It also provides the first empirical evidence of the relationship between board gender diversity and earnings management in the MENA region.

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Longitudinal approach to the study of corporate governance code and earnings management relationship: the case of Saudi Arabia

Cited by 6 publications

References 95 publications

Corporate governance regulation in regulatory space of a developing country: actors, strategies and outcomes

Corporate governance regulation in regulatory space of a developing country: actors, strategies and outcomes

Information Technology Governance and Corporate Boards’ Relationship with Companies’ Performance and Earnings Management: A Longitudinal Approach

Does the board of directors play a role in mitigating real and accrual-based earnings management in the MENA context?

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