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Article
Publication date: 31 December 2020

Hichem Khlif, Khaled Samaha and Ines Amara

The authors examine the association between internal control quality (ICQ) and voluntary disclosure and test whether chief executive officer (CEO) duality, as a proxy for CEO…

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Abstract

Purpose

The authors examine the association between internal control quality (ICQ) and voluntary disclosure and test whether chief executive officer (CEO) duality, as a proxy for CEO structural power, moderates such a relationship in an emerging market (Egypt).

Design/methodology/approach

ICQ is measured using a survey of external auditors, while a content analysis approach is used to measure the level of voluntary disclosure in annual reports.

Findings

Based on a sample of 512 firm-year observations over the period of 2007–2014, the authors document that ICQ is positively and significantly associated with voluntary disclosure, suggesting that better controls improve corporate reporting policy. In addition, CEO duality moderates the association between ICQ and voluntary disclosure since this positive relationship association becomes insignificant for companies characterised by CEO duality. These results remain stable after controlling for endogeneity (self-selection problem), political instability and industry characteristics.

Research limitations/implications

The findings of the study provide preliminary evidence on the association between ICQ and voluntary disclosure, and how CEO structural power may affect this association. Future empirical investigations may extend this work to cover the relationship between ICQ and other attributes of corporate transparency including earnings quality and accounting conservatism.

Practical implications

The findings highlight the need for Egyptian regulators to enact new rules obliging firms to communicate information about ICQ or charging auditors to report information about firm's ICQ in their reports. The results also alert policymakers about the adverse effect of combined leadership structure (CEO duality) since it mitigates the positive impact of ICQ on voluntary disclosure.

Originality/value

The authors contribute to internal control literature by exploring the association between ICQ and voluntary disclosure on an emergent unregulated market with respect to internal control disclosure. They also highlight how CEO duality, as a proxy for CEO power, mitigates the beneficial effect of ICQ on corporate reporting policy on the Egyptian stock exchange (EGX).

Details

Journal of Applied Accounting Research, vol. 22 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 8 October 2015

Hichem Khlif and Keryn Chalmers

This study reviews the use of meta-analysis in accounting research. We categorize the meta-analytic research into five topics: financial reporting, auditing, corporate governance…

Abstract

This study reviews the use of meta-analysis in accounting research. We categorize the meta-analytic research into five topics: financial reporting, auditing, corporate governance and accounting quality, management accounting, and miscellaneous topics. Further, we classify the studies by the meta-analysis technique employed: Hunter et al. (1982), Hunter and Schmidt (2000), Lipsey and Wilson (2001), and Stouffer’s approach. We identify 27 meta-analytical studies over the period 1985–2014 with financial reporting (auditing) topics representing seven (six) of these studies. Our review highlights that meta-analytic methods are being applied and accepted, more frequently, to answer complex questions concerning the moderating effects of country-level variables, such as national culture, economic conditions, and institutional characteristics, on various associations of interest.

Details

Journal of Accounting Literature, vol. 35 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 3 July 2017

Khaled Samaha and Hichem Khlif

This paper aims to examine the impact of audit-related attributes and regulatory reforms on timely disclosure as proxied by audit report lag (ARL) in an emerging market setting…

Abstract

Purpose

This paper aims to examine the impact of audit-related attributes and regulatory reforms on timely disclosure as proxied by audit report lag (ARL) in an emerging market setting, namely, Egypt.

Design/methodology/approach

The paper used the balanced panel data of 372 firm-years observations of the most actively traded companies on the Egyptian Stock Exchange over the period from 2007 to 2010. The study measures the dependent variable of ARL as the number of days between the client’s fiscal year-end and the audit report.

Findings

Multivariate analysis indicates that audit committee activity (proxy for regulatory reforms) and external auditor type (proxy for audit-related attributes) contribute significantly to the reduction of ARL and increase disclosure timeliness. Furthermore, the paper found that ARL witnessed a slight decrease following the adoption of the new Egyptian Standards on Auditing (ESA). Finally, the paper’s findings show that industry types moderate the relationship between ARL and several audit-related variables and corporate governance attributes.

Practical implications

The results may have policy implications for both regulators and investors. For instance, policymakers in Egypt can enact new rules to reduce the Chief Executive Officer duality and establish the minimum required number of audit committee meetings to improve transparency level and, thus, increase disclosure timeliness. Besides, if future regulations aiming to increase disclosure timeliness are intended by Egyptian regulators, this paper’s findings suggest that this may have implications for the audit market because the Big Four audit firms will be more able to meet shorter audit delays.

Originality/value

The empirical evidence provided in this study further enhances the understanding of timely disclosure in Egypt which represents one of the leading emerging markets in the Middle East and North Africa region.

Details

Journal of Financial Reporting and Accounting, vol. 15 no. 2
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 3 October 2016

Hichem Khlif

This paper aims to review the use of Hofstede’s cultural dimensions in accounting research over the period 1995-2015.

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Abstract

Purpose

This paper aims to review the use of Hofstede’s cultural dimensions in accounting research over the period 1995-2015.

Design/methodology/approach

The author combines electronic and manual searches to identify relevant studies using key words like “national culture” or “Hofstede’s cultural dimensions” and “accounting” or “auditing” or “taxation”. The search yields a total number of 35 published studies. For each reviewed stream of research, the author presents its theoretical underpinning and summarises its main results.

Findings

The paper identifies four main accounting research topics being reporting policy, auditing, taxation and miscellaneous accounting. These studies use three main methodologies including empirical, experiment and meta-analysis. The review reveals that individualism is positively related to corporate reporting policy, while it is associated with low levels of tax evasion. High levels of masculinity are generally associated with low disclosure environments and aggressive accounting manipulations. Finally, long-term orientation has been examined with respect to social environmental disclosure, and findings are supportive of a positive association between both variables.

Originality/value

This literature review represents a historical record, an introduction and a guidance for researchers who aim to examine whether Hofstede’s cultural dimensions may be useful in explaining other accounting phenomena. It also presents the main criticisms addressed to Hofstede’s framework. Finally, it conducts a critical analysis for reviewed studies and highlights their reductionist approach in explaining accounting phenomena and methodological weaknesses.

Details

Meditari Accountancy Research, vol. 24 no. 4
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 14 March 2018

Keryn Chalmers, David Hay and Hichem Khlif

In 2001, the US moved to regulate internal control reporting by management and auditors. While some jurisdictions have followed the lead of the US, many others have not. An…

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Abstract

In 2001, the US moved to regulate internal control reporting by management and auditors. While some jurisdictions have followed the lead of the US, many others have not. An important question, therefore, is the relevance of internal control to stakeholders. The more specific issue of the benefits of US-style regulation of internal control reporting is also topical. We review studies on the determinants of internal control quality and its economic consequences for stakeholders including investors, creditors, managers, auditors and financial analysts. We extend previous reviews by focusing on US studies published since 2013 as well as all non-US studies investigating IC quality including countries regulating IC disclosure as well as unregulated settings and both developed and developing economies. In doing so, we identify research questions where evidence remains mixed and new directions in which there are research opportunities.

Three main insights arise from our analysis. First, evidence on the economic consequences of internal control quality suggests that the quality of internal control can have a significant effect on decision making by users of financial information. Second, the results of research on the empirical association between ownership structure, certain board characteristics and internal control quality is generally mixed. Empirical evidence concerning the association between audit committee characteristics and internal control quality generally supports a positive and significant association. Finally, while studies in non-US jurisdictions are increasing, opportunities remain to explore the determinants and consequences of internal control in other jurisdictions. Our review provides evidence for policy makers of whether there are benefits from requiring management and auditors to report on internal control over financial reporting.

Details

Journal of Accounting Literature, vol. 42 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 11 February 2022

Hela Gontara, Imen Khelil and Hichem Khlif

The purpose of the paper is to examine the association between internal control quality (ICQ) and audit report lag (ARL) and to test whether family directors affect the…

Abstract

Purpose

The purpose of the paper is to examine the association between internal control quality (ICQ) and audit report lag (ARL) and to test whether family directors affect the relationship.

Design/methodology/approach

ICQ is measured by using the framework developed by Michelon et al. (2015), while ARL is measured as the number of days from fiscal year-end to the date of the auditor's report.

Findings

Using a sample of 190 French companies over the period of 2016–2019, the authors document that ICQ is negatively associated with ARL, suggesting that ICQ represents a key determinant of audit delay. When testing for the moderating effect of family directors on this relationship, findings show that under high percentage of family directors on the board, this relationship becomes insignificant.

Originality/value

This paper extends previous research on audit delays by investigating the moderating effect of family directors on the relation between ICQ and ARL in the French setting. The empirical evidence highlights the adverse effect of the concentration of family directors on the board on timely disclosure as proxied by ARL.

Details

Journal of Family Business Management, vol. 13 no. 2
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 4 April 2019

Hichem Khlif and Khaled Samaha

This paper aims to examine the relationship between board independence and internal control quality (ICQ) in Egypt and investigate whether CEO duality moderates such an…

Abstract

Purpose

This paper aims to examine the relationship between board independence and internal control quality (ICQ) in Egypt and investigate whether CEO duality moderates such an association.

Design/methodology/approach

A survey among external auditors is used to assess ICQ among Egyptian listed firms over the period of 2007-2010.

Findings

Findings show that board independence does not have a significant positive effect on ICQ. However, when testing for the moderating effect of CEO duality on such a relationship, the authors document that the association becomes positive and significant under combined board leadership structure, whereas it is negative under separated leadership structure.

Originality/value

The authors’ results demonstrate that CEO duality plays a governance role in weak legal environment like Egypt by strengthening board independence role in increasing ICQ.

Details

International Journal of Law and Management, vol. 61 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 4 February 2021

Imen Khelil and Hichem Khlif

The objective of this paper is to provide insights into internal auditors’ perceptions and experiences regarding their role as assurance providers in the Tunisian public sector…

Abstract

Purpose

The objective of this paper is to provide insights into internal auditors’ perceptions and experiences regarding their role as assurance providers in the Tunisian public sector through the detection, correction and reporting of internal control weaknesses and wrongdoings.

Design/methodology/approach

A qualitative research is conducted based on organizational role theory and using semi-structured interviews with 13 chief audit executives across 13 Tunisian public-sector organizations. A thematic analysis of the responses of interviews is then performed.

Findings

The content analysis of internal auditors’ responses shows that ambiguity surrounds the role of Tunisian internal auditors within the public sector because they must serve multiple customers (e.g. informal groups in Tunisian society, managers and audit committees) with conflicting expectations. In addition, the authors find that they adopt a strategy of trade-off between commercial and professional values, tending to prioritize top managers’ interests at the expense of other stakeholders. Responses provided by interviewees reveal that the absence of legal protection of internal auditors is one major obstacle explaining their failure to perform their role as assurance providers.

Originality/value

This study provides preliminary evidence of the challenges faced by internal auditors working in public-sector organizations in an emerging African setting. The findings of this study also emphasize the need to rethink the concept of independence of the internal auditing function within the Tunisian public sector given the apparent inability of internal auditors to alter their commercial focus. Furthermore, the results may increase the awareness of professional institutions about the necessity of enacting rules reinforcing internal auditors’ protection that may strengthen the role played by internal auditors within public-sector organizations.

Details

Meditari Accountancy Research, vol. 30 no. 1
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 22 November 2022

Ines Amara, Imen Khelil, Anis El Ammari and Hichem Khlif

This paper aims to examine the association between money laundering and infrastructure quality and whether the strength of auditing and reporting standards (SARS) moderates this…

Abstract

Purpose

This paper aims to examine the association between money laundering and infrastructure quality and whether the strength of auditing and reporting standards (SARS) moderates this association.

Design/methodology/approach

The sample includes 348 country-year observations over the period of 2015–2017. The authors use Basel Anti-Money Laundering reports for 2015, 2016 and 2017 to collect data concerning money laundering. Infrastructure quality and the remaining variables are gathered from the Global Competitiveness reports for the same years.

Findings

Results show that money laundering is negatively associated with infrastructure quality. This negative association remains stable for countries characterised by low SARS, while it becomes less pronounced for countries with high SARS. Additional tests for the moderating impact of the SARS, using an interaction term between money laundering and SARS dummy variable, confirm that high SARS mitigates the adverse effect of money laundering on infrastructure quality.

Originality/value

These findings are important for policymakers, as they put emphasis on the adverse effect of money laundering and financial crimes on infrastructure quality and how solid auditing and reporting standards may improve infrastructure quality and reduce the negative effect of money laundering on the same variable. Thus, strengthening legislations concerning auditing and reporting standards in one country may improve infrastructure quality and combat money laundering and its adverse impacts.

Details

Pacific Accounting Review, vol. 35 no. 2
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 12 July 2022

Fadoua Toumi, Hichem Khlif and Imen Khelil

This study aims to investigate the effect of national culture (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation) on audit report lag.

Abstract

Purpose

This study aims to investigate the effect of national culture (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation) on audit report lag.

Design/methodology/approach

The authors use two econometric approaches (ordinary least squares (OLS) and quantile regression) using STATA software for a sample of 1,208 firm-year observations over the period of 2017–2018.

Findings

Using Hofstede’s (2001) cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation), the authors find that masculinity and long-term orientation are positively associated with audit report lag, while uncertainty avoidance is negatively associated with the same variable. Quantile regressions suggest that the adverse effect of masculinity on audit report lag is more prevailing for companies communicating companies' annual reports in a timely manner. Furthermore, the positive association between power distance and audit report lag exists only under tardy disclosure regime. Quantile regressions also confirm that the negative (positive) effect of uncertainty avoidance (long-term orientation) on audit report lag is maintained under different timely disclosure regime. Additional analysis conducted with respect to legal system shows that individualism becomes a significant predictor of audit delays with a significant negative effect for common law countries, while uncertainty avoidance has a positive effect on the same variable in civil law countries characterized by high level of discretion and secrecy.

Practical implications

The results of this study suggest that national culture as an informal institution may complement formal institutions (e.g. financial markets) in promoting timely disclosure. For instance, foreign investors may view high uncertainty avoidance scores, in common law emerging economies, as an indicator of transparency and timely disclosure.

Originality/value

This study adds to the extant literature a further understanding of the impact of cultural dimensions on timely disclosure, as proxied by, audit report lag. The use of quantile regression approach shows how different timely disclosure regime may affect the association between masculinity, power distance and audit report lag.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

1 – 10 of 42