Search results

This paper aims to examine the influence of corporate governance mechanisms on audit delay in companies listed on the Kuwait Stock Exchange (KSE) in 2013. Kuwait has the unusual audit regulation that listed companies must be jointly audited by two independent auditors who both sign the report.

Audit delay is measured as the number of days that elapse between the end of the company’s financial year and the date of the audit report. A multivariate regression model analyzes the association between audit delay and six corporate governance mechanisms, namely, joint auditor combination, board size, board independence, role duality, institutional ownership and government ownership.

There is a wide range in audit delay among KSE companies, ranging from 7 to 159 days. After controlling for various company characteristics, there is a significant difference in the timeliness of audit reports depending on the combination of auditors: audit delay is significantly reduced when the audit is performed by Big-4 companies. Moreover, companies with larger boards, a greater number of independent directors and separate CEO–chairman roles are more likely to produce timely financial statements. Higher government ownership levels were associated with greater audit delay, while no significant association was found for institutional ownership. These results are robust to a variety of sensitivity checks.

The findings highlight the effectiveness of corporate governance mechanisms in shaping the timeliness of audit reports; thus, these mechanisms should be taken into account in any regulatory action to reduce audit delay. In addition, the findings of this study provide empirical evidence that can be used by regulators and enforcement bodies in their continued campaigns promoting the role and importance of corporate governance mechanisms in improving the quality and timeliness of financial reporting.

The study extends the audit delay literature by investigating the issue in a joint audit setting. The empirical evidence shows a wide range of audit delay in KSE-listed companies, which raises questions about the costs and benefits of the joint audit regulation for the length of this period.

This study focuses on the evaluation of the introduction of international corporate governance codes such as Combined Code (UK) and King Report III (SA) in the Greek publicly listed enterprises. This research is based on a case study analysis of six publicly listed enterprises (three of them are traded in the high capitalization index and another three in the medium‐low capitalization index of the Athens Stock Exchange). The main purpose of this paper is to examine the extent of international corporate governance codes impact in the relevant local laws and regulations, as well as the adopted best practices.

Qualitative research is carried out to address the research topic, using primary and secondary data. The primary source of this study is the professional experience of the author in the field of corporate governance within publicly listed enterprises, whereas secondary sources are the international corporate governance codes, Greek corporate governance laws, regulations and best practices, books, working papers and published articles.

Although certain parts of international governance codes requirements have been applied by a number of Greek publicly listed enterprises, there is a long way to go to achieve best practice. The reason for this is the typical, however not substantial application of international governance codes requirements.

Research is proved to be very useful as it describes a gap analysis in the application of international governance codes in the areas of corporate governance, internal and external auditing, as well as the regulators therefore making it easier to identify potential areas for improvement.

Communication of risk management (RM) practices are a critical component of good corporate governance. Research, to date, has been of little benefit in informing regulators internationally. This paper seeks to contribute to the literature by investigating how listed Australian companies disclose RM information in annual report governance statements in accordance with the Australian Securities Exchange (ASX) corporate governance framework.

To address this study’s research questions and related hypotheses, the authors examine the top 300 ASX-listed companies by market capitalisation at 30 June 2010. For these firms, the authors identify, code and categorise RM disclosures made in the annual according to the disclosure categories specified in ASX Corporate Governance Principles and Recommendations (CGPR). The derived data are then examined using a comprehensive approach comprising thematic content analysis and regression analysis.

The results indicate widespread divergence in disclosure practices and low conformance with the Principle 7 of the ASX CGPR. This result suggests that companies are not disclosing all “material business risks” possibly due to ignorance at the board level, or due to the intentional withholding of sensitive information from financial statement users. The findings also show mixed results across the factors expected to influence disclosure behaviour. While the presence of a risk committee (RC) (in particular, a standalone RC) and technology committee (TC) are found to be associated with some improvement in disclosure levels, the authors do not find evidence that company risk measures (as proxied by equity beta and the market-to-book ratio) are significantly associated with greater levels of RM disclosure. Also, contrary to common findings in the disclosure literature, factors such as board independence and expertise, audit committee independence and the usage of a Big-4 auditor do not seem to impact the level of RM disclosure in the Australian context.

The study is limited by the sample and study period selection as the RM disclosures of only the largest (top 300) ASX firms are examined for the fiscal year 2010. Thus, the findings may not be generalisable to smaller firms or earlier/later years. Also, the findings may have limited applicability in other jurisdictions with different regulatory environments.

The study’s findings suggest that insufficient attention has been applied to RM disclosures by listed companies in Australia. These results suggest RM disclosures practices observed in the Australian setting may not be meeting the objectives of regulators and the needs of stakeholders.

The Australian setting provides an ideal environment to examine RM communication as the ASX has explicitly recommended RM disclosures areas in its principle-based governance rules since 2007 (Principle 7). This differs from other jurisdictions where such disclosure recommendations are typically not provided and provides us with a benchmark to examine the nature and quality of RM disclosures. Despite the recommendation, the authors reveal that low levels and poor RM communication are prevalent in the Australian setting and warrant further investigation.

The purpose of this paper is to investigate whether a change of corporate governance occurs after financial crimes in Canada revealed through external whistleblowing.

Based on the methodology of Smaili and Arroyo (2019), the authors implement a qualitative research framework to examine 11 alleged Canadian corporate financial statement fraud cases publicly exposed during the 1995–2012 period.

The analysis suggests that firms had a weak traditional corporate governance mechanism before the external whistleblowing occurred. In almost every case, the chief executive officer (CEO) was also the chair of the board of directors. Although the reports by Dey and Saucier recommend that independent directors make up at least 75% of Canadian boards, we note that the percentage of independent directors was under 70% in six cases. Moreover, only two firms had a whistleblowing policy in place, and seven firms had a major shareholder. Regarding the consequences for corporate governance after whistleblowing, the analysis shows that the companies that survived the whistleblowing had enhanced their internal corporate governance by the third year after the whistleblowing. In fact, at all the surviving companies, the CEO was no longer the chair, and the percentage of independent directors had increased to 80%. However, for those survival companies that did not have a whistleblowing policy before the event, the situation did not change quickly, and they only implemented a policy after the enforcement of the new regulation in the year 2003.

This paper adds new insights to the research on financial crime by investigating the relation between corporate governance and whistleblowing.

This study aims to explore the quality of corporate governance disclosure under an “apply and explain” regime in the context of an emerging economy (Mauritius), following a transition from the traditional “comply or explain” approach within the national code of corporate governance.

The research relies on a content analysis of corporate governance disclosure in 86 annual reports of companies listed on the Stock Exchange of Mauritius for the financial periods 2018–2019 and 2019–2020, one-way analysis of variance tests and draws on the typology of corporate governance explanations developed by Shrives and Brennan (2015), focusing on specificity, location and comprehensiveness dimensions. This paper draws on legitimacy theory and the concepts of substantive and symbolic disclosures to guide the interpretation of the findings.

From a specificity point of view, the disclosure index revealed significant variations, with the highest score being four times the lowest score. With regards to location and comprehensiveness, only around half of companies are making optimum use of a corporate governance report and providing explanations by principles. This paper also illustrated how some firms provided symbolic disclosures. Overall, there are disparities in the application of the code by companies, reflected in a blend of substantive and symbolic disclosures to maintain their legitimacy.

This study examines “apply and explain” disclosures in a emerging economy in contrast to the “comply or explain” approach studied so far in the literature. Merely professing a “well intended” shift to the “apply and explain” approach does not necessarily lead to improvements in the quality of corporate governance disclosures. Companies, governance professionals and regulatory bodies could formulate disclosure guidance to better underpin the implications of the “apply and explain” approach.

The European Commission (EC) is currently examining methods to increase the effectiveness of corporate governance disclosures. This paper aims to examine whether the credit rating agencies (CRAs), both on account of their influence within the marketplace and also their methodological approach to rating Governance, may have a greater role to play in the EC achieving those particular objectives.

This paper is based upon a normative methodology, upon which the issue is contextualised and a proposal is put forward regarding a methodological alteration that can be instituted by the CRAs.

The paper finds that the CRAs may have a much greater role to play in meeting the objectives of the EC. Whilst the EC is focusing upon regulatory monitoring, the paper finds that there is a potential for a more efficient model within which the CRAs adapt their methodologies to include corporate governance disclosure into their rating processes.

In presenting the idea that the comply or explain principles put forward by the EC are proving to be somewhat ineffective, the paper contributes to the field by suggesting there are private endeavours which may add a sense of impact to disclosure proceedings, rather than the purely public regime being envisioned.

The purpose of this paper is to investigate the impact of corporate governance disclosure on share price accuracy of listed companies in the United Arab Emirates (UAE).

Data on corporate governance disclosure were obtained from the financial statements of companies listed in the UAE stock market, and share price accuracy indices were crafted from each company’s weekly share price returns between 2008 and 2009, using generalized least squares regression analysis. Multiple regression analysis with fixed effects was then implemented to test the study hypotheses.

Voluntary corporate governance disclosure has a significant positive impact on share price accuracy. There is also evidence that mandatory corporate governance disclosure plays an important positive role on share price accuracy in the UAE business environment.

This paper covers a two-year transitional period during implementation of a new corporate governance code in the emerging market of the UAE.

This paper encourages corporate managers in the UAE, as well as in other countries with similar business conditions, to review their voluntary corporate governance disclosure policies in accordance with international good practice. The authors suggest that regulators and accounting standard setters should extend mandatory corporate governance disclosure rules for the benefit of stock market participants and the overall welfare of the economy.

This paper extends the literature on the relationship between accounting disclosure and share price accuracy to include corporate governance disclosure in emerging market economies such as the UAE. It also shows the importance of both voluntary and mandatory corporate governance disclosure.

Corporate governance has as ancient a pedigree as the formation of companies. However, six contemporary developments have provided a focus which makes this the era par excellence of corporate governance. Under review are a representative set of the economies of the world. A start is made with the UK and the Cadbury Report, which in similar fashion to the development of British Quality Standard 5750 into ISO 9000, has now itself taken on world currency. The end piece of Cadbury‐related developments was the final Report of the Hampel Committee of January 1998. The USA spawned several reports which fed into the Cadbury initiative, notably the Treadway and COSO Reports, as well as the influence of the Securities and Exchange Commission. A consideration of Canada is followed by the European dimension and the study carried out by Ernst and Young. Finally South Africa, Australia and Japan are treated and conclusions drawn, including the collaborative partnership that may be formed between management accountants and internal auditors.

The purpose of this paper is twofold: first, to assess the degree of disclosure about compliance with corporate governance code and the explanations provided by Italian firms and second, to analyze the relationships between this disclosure and different variables of ownership structure.

The sample was composed of 75 non-financial companies listed in Italy in 2016. Content analysis of the corporate governance statement and ordinary least squares (OLS) multiple regression models were used to test the hypotheses.

Companies tended to comply with the corporate governance code and to disclose this information, but when they decided to not comply, they did not provide adequate explanations. Findings revealed a negative relation between ownership concentration and the disclosure analyzed. Results also highlight that a more equal distribution of shares among larger shareholders is beneficial for disclosure. Moreover, the presence of a dominant financial shareholder at a high level of ownership concentration creates inefficiency of the degree of adherence to the comply-or-explain principle.

This study examines in depth the underexplored issue of “explanation” and exceeds the issue of ownership concentration, which has already been examined extensively, raising the issues of counterweight power and shareholders’ identities, which remain underexplored. In this way, results presented contribute to explaining some causes of the diverse findings that research has found about the relationship between ownership concentration and voluntary disclosure, demonstrating the importance of counterweight power and largest shareholder’s identity. Consequently, when self-regulating initiatives are designed and implemented, legislators, regulators and managers should not ignore the characteristics of the firms’ ownership structure.

This paper provides evidence regarding the efficacy of the “comply or explain” approach in Greece and has three objectives: to improve our knowledge of the concept of this accountability mechanism, to elevate auditors’ potential role in the control of corporate governance (CG) statements and to contribute to the discussion about the reform of this principle; a prolonged dialogue that has been started by European Commission in the light of the recent financial crisis.

The approach taken is a content analysis of CG statements and Web sites of a non-probability sample of 144 Greek listed companies on the Athens Stock Exchange for the year 2011. Particularly, 52 variables were evaluated from an audit compliance perspective using a coding scheme. From this procedure, the level of compliance with Hellenic Federation of Enterprises (SEV) code, as well as the content of the explanations provided for non-compliance, were rated.

The results show that although the degree of compliance is low (the average governance rating is 35.27 per cent), the evaluation of explanations of non-compliance is even lower (from the 64.73 per cent of the non-compliance, the 40.95 per cent provides no explanation at all).

The research limitations are associated with the content analysis methodology, as well as the reliability of CG statements.

This study indicates that companies on the one hand tend to avoid the compliance with these recommendation practices, raising questions regarding the effectiveness of the SEV code; while on the other, they are not in line with the spirit of the CG code, as they do not provide adequate explanations. These results assist practitioners and/or policy-makers in perceiving the efficacy of the “comply or explain” approach.

While there is a great body of research that has looked into the compliance with best practices, this study is different because it is the first one that rates not only the degree of the compliance with the code’s practices but also the content of the explanations provided for non-compliance. This is particularly interesting because it adds to the body of research by providing a new approach in measuring the quality of the “comply or explain” principle in-depth.