IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies

Earnings quality (EQ) is a vital indicator for financial reporting users. However, the existence of accrual-based (ACEM) and real earnings management (TREM) might distort EQ. This thesis has four objectives. First, it intends to investigate EQ changes among different types of firm ownership pre and...

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Main Author:	Alhadi, Saleh M. A. Abd
Format:	Thesis
Language:	English
Published:	2019
Subjects:	Financial statements - Standards Accounting - Standards
Online Access:	http://psasir.upm.edu.my/id/eprint/83288/1/FEP%202019%2028%20ir.pdf
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id	my-upm-ir.83288
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spelling	my-upm-ir.832882022-01-07T02:09:09Z IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies 2019-09 Alhadi, Saleh M. A. Abd Earnings quality (EQ) is a vital indicator for financial reporting users. However, the existence of accrual-based (ACEM) and real earnings management (TREM) might distort EQ. This thesis has four objectives. First, it intends to investigate EQ changes among different types of firm ownership pre and post IFRS adoption. Second, it attempts to determine the relationship between board of directors (i.e. multiple directorships, social title, board effectiveness and audit committee (AC) effectiveness), ownership structure (i.e. managerial, institutional, family, and politically-connected (PC) ownership), and EQ. Third, it examines the moderating effect of IFRS on the link between corporate governance (CG) mechanisms and EQ. Finally, this research investigates the moderating role of investor protection (INP) on the relationship between CG and EQ. The study used a sample of 209 non-financial companies listed on the Bursa Malaysia during the period of 2007 to 2016. It also employed the Paired t-test to achieve the first objective and the Generalized Method of Moments (GMM) for the rest of the objectives. The results indicate that managerial, institutional, and family ownership provide an appropriate environment and strengthen IFRS effectiveness in reducing ACEM. Also, both the board and ownership characteristics significantly influence EQ indicators. This study finds that multiple directorships, AC effectiveness, and PC ownership significantly reduce both ACEM and TREM, while the rest influence only one of the earnings management indicators. After IFRS, ownership structure plays a major role in improving the firm's EQ. More importantly, the monitoring role of board and AC attributes are more efficient in a healthy INP environment. Policymakers should realise that developing accounting standards alone will not be able to improve EQ per se. In addition, accounting and law enforcements are essential in fighting corporate misbehaviours. As ownership concentration can substitute the monitoring mechanism (which may backfire), alternative characteristics of good governance, such as, INP are indispensable. Financial statements - Standards Accounting - Standards 2019-09 Thesis http://psasir.upm.edu.my/id/eprint/83288/ http://psasir.upm.edu.my/id/eprint/83288/1/FEP%202019%2028%20ir.pdf text en public doctoral Universiti Putra Malaysia Financial statements - Standards Accounting - Standards Senik, Rosmila
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English
advisor	Senik, Rosmila
topic	Financial statements - Standards Accounting - Standards
spellingShingle	Financial statements - Standards Accounting - Standards Alhadi, Saleh M. A. Abd IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies
description	Earnings quality (EQ) is a vital indicator for financial reporting users. However, the existence of accrual-based (ACEM) and real earnings management (TREM) might distort EQ. This thesis has four objectives. First, it intends to investigate EQ changes among different types of firm ownership pre and post IFRS adoption. Second, it attempts to determine the relationship between board of directors (i.e. multiple directorships, social title, board effectiveness and audit committee (AC) effectiveness), ownership structure (i.e. managerial, institutional, family, and politically-connected (PC) ownership), and EQ. Third, it examines the moderating effect of IFRS on the link between corporate governance (CG) mechanisms and EQ. Finally, this research investigates the moderating role of investor protection (INP) on the relationship between CG and EQ. The study used a sample of 209 non-financial companies listed on the Bursa Malaysia during the period of 2007 to 2016. It also employed the Paired t-test to achieve the first objective and the Generalized Method of Moments (GMM) for the rest of the objectives. The results indicate that managerial, institutional, and family ownership provide an appropriate environment and strengthen IFRS effectiveness in reducing ACEM. Also, both the board and ownership characteristics significantly influence EQ indicators. This study finds that multiple directorships, AC effectiveness, and PC ownership significantly reduce both ACEM and TREM, while the rest influence only one of the earnings management indicators. After IFRS, ownership structure plays a major role in improving the firm's EQ. More importantly, the monitoring role of board and AC attributes are more efficient in a healthy INP environment. Policymakers should realise that developing accounting standards alone will not be able to improve EQ per se. In addition, accounting and law enforcements are essential in fighting corporate misbehaviours. As ownership concentration can substitute the monitoring mechanism (which may backfire), alternative characteristics of good governance, such as, INP are indispensable.
format	Thesis
qualification_level	Doctorate
author	Alhadi, Saleh M. A. Abd
author_facet	Alhadi, Saleh M. A. Abd
author_sort	Alhadi, Saleh M. A. Abd
title	IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies
title_short	IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies
title_full	IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies
title_fullStr	IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies
title_full_unstemmed	IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies
title_sort	ifrs adoption, corporate governance, investor protection and earnings quality in malaysian listed companies
granting_institution	Universiti Putra Malaysia
publishDate	2019
url	http://psasir.upm.edu.my/id/eprint/83288/1/FEP%202019%2028%20ir.pdf
_version_	1747813373520642048

IFRS adoption, corporate governance, investor protection and earnings quality in Malaysian listed companies

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