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Article
Publication date: 27 May 2024

Emrah Arioglu, Metin Borak and Murat Ocak

This study aims to investigate whether there is a relationship between the religiosity levels of chairpersons’ hometowns and the financial reporting quality of companies.

Abstract

Purpose

This study aims to investigate whether there is a relationship between the religiosity levels of chairpersons’ hometowns and the financial reporting quality of companies.

Design/methodology/approach

Using a unique hand-collected data set obtained from various sources, the authors use ordinary least squares and logistic regressions to test the hypotheses and further implement various methods to address potential issues such as omitted variables, reverse causality and selection bias problems. In addition, the authors control for the religiosity level of chief executive officers’ (CEOs) hometowns. Finally, the authors divide the sample into two subsamples – companies with strong corporate governance and companies with weak corporate governance – to investigate the effect of chairpersons’ hometown religiosity on financial reporting quality under strong or weak corporate governance.

Findings

The findings demonstrate that companies with chairpersons from religious hometowns produce high-quality financial reports. Additional tests, such as the Heckman selection model and instrument variable regression, confirm the robustness of the main results. Controlling for the religiosity level of the CEO’s hometown yields consistent findings with the main results. Finally, additional results indicate that the religiosity levels of chairpersons’ hometowns play a significant role in enhancing financial reporting quality in companies with weak corporate governance.

Practical implications

Companies should consider appointing board members or chairpersons from more religious hometowns, as the empirical results of this study support the positive effects of chairpersons’ hometown religiosity on financial reporting quality.

Originality/value

To the best of the authors’ knowledge, the current study is among the first to demonstrate the relationship between the religiosity level of the chairpersons’ hometown and the financial reporting quality of companies. The study introduces unique hometown religiosity proxies and controls for various variables related to corporate governance, chairperson attributes, company characteristics, and audit firm characteristics.

Details

Managerial Auditing Journal, vol. 39 no. 5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 8 July 2022

Murat Ocak, Serdar Ozkan and Gökberk Can

In this paper, the authors examine the association between the amount of continuing professional education (CPE) hours per staff and audit quality in terms of discretionary…

Abstract

Purpose

In this paper, the authors examine the association between the amount of continuing professional education (CPE) hours per staff and audit quality in terms of discretionary accruals and audit opinion.

Design/methodology/approach

Several methodologies are adopted to test the hypotheses, including the ordinary least square (OLS) and logistic regression (Logistic). The authors also employ instrument variables regression with two least square (IVREG with 2SLS) and instrument variables probit model (IVProbit) to address the possible endogeneity and strengthen the validity of the main estimation results.

Findings

The main results show that there is a positive and significant relationship between CPE hours per staff and audit quality. As the authors grouped CPE into four areas (finance, auditing and accounting, tax, law and regulations and others) the results are more robust for the sub-sample “accounting and audit” and “others”. Moreover, the findings of this study suggest that CPE hours per staff do not affect audit quality significantly for Big4 audit firms compared to non-Big4 firms.

Research limitations/implications

The sample size of the present study is quite small because the transparency reports of the audit firms in Turkey have been available since 2013 and the authors could not reach some auditor demographics at the individual level and some attributes at the audit firm level. Besides, some alternative audit quality measures, such as audit effort, audit fees are not employed because they are not disclosed.

Originality/value

This study contributes to the audit literature using Turkish audit firms. The authors believe that the setting of Turkey may yield interesting results because of the data it provides.

Article
Publication date: 8 March 2022

Murat Ocak

This paper aims to examine the effect of audit firm governance on audit quality. Audit firm governance is broken down into two categories, namely, board ownership and engagement…

Abstract

Purpose

This paper aims to examine the effect of audit firm governance on audit quality. Audit firm governance is broken down into two categories, namely, board ownership and engagement partner ownership.

Design/methodology/approach

Audit firms from Borsa Istanbul and their clients who are quoted there as well were used to test the hypotheses. The final sample covers 1,291 observations at the client level between 2013 and 2019. Ordinary least square was conducted to test the hypotheses. Heckman selection model and instrument variable regression with two-stage least square (IVREG with 2SLS) were also used to control the self-selection and endogeneity problems, respectively. To enhance the validity of the main results, alternative audit quality measures were used.

Findings

The empirical findings show that board ownership and engagement partner ownership have an impact on audit quality. The results indicate that engagement partners with high shares enhance audit quality only in Big4 audit firms. The positive effect of higher board ownership on audit quality is more prominent in non-Big4 firms. The Heckman two-stage procedure and IVREG with 2SLS were conducted, both of which were consistent with the main results. The results regarding alternative audit quality measures are in accordance with the main estimation results.

Originality/value

To the best of the author’s knowledge, this is the first study examining the impact of audit firm board ownership on audit quality. In addition, this paper further advances the literature by investigating the effects of ownership at engagement partner levels on audit quality in the context of an emerging market, Turkey.

Details

Journal of Financial Reporting and Accounting, vol. 22 no. 3
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 31 May 2019

Murat Ocak and Gökberk Can

Recent studies regarding auditor experience generally focus on auditor overall experience in accounting, auditing, finance and related fields (Hardies et al., 2014), auditor…

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Abstract

Purpose

Recent studies regarding auditor experience generally focus on auditor overall experience in accounting, auditing, finance and related fields (Hardies et al., 2014), auditor sector and domain experience (Bedard and Biggs, 1991; Hammersley, 2006), auditor experience as CPA (Ye et al., 2014; Sonu et al., 2016) or big N experience (Chi and Huang, 2005; Gul et al., 2013; Zimmerman, 2016) or auditors’ international working experience (Chen et al., 2017). But there is little attention paid to where auditors obtained their experience from? And how do auditors with government experience affect audit quality (AQ)? This paper aims to present the effect of auditors with government experience on AQ.

Design/methodology/approach

The authors used Turkish publicly traded firms in Borsa Istanbul between the year 2008 and 2015 to test the hypothesis. The sample comprises 1,067 observations and eight years. Two main proxies of government experience are used in this paper. The first proxy is auditor’s government experience in the past. The second proxy is the continuous variable which is “the logarithmic value of the number of years of government experience”. Further, auditor overall experience in auditing, accounting, finance and other related fields are also used as a control variable. Audit reporting aggressiveness, audit reporting lag and discretionary accruals are used as proxies of AQ. Besides this, the authors adopted the model to estimate the probability of selecting a government-experienced auditor, and they presented the regression results with the addition of inverse Mills ratio.

Findings

The main findings are consistent with conjecture. Government-experienced auditors do not enhance AQ. They are aggressive, and they complete audit work slowly and they cannot detect discretionary accruals effectively. Spending more time in a government agency makes them more aggressive and slow, and they do not detect earnings management practices. The Heckman estimation results regarding the variable of interest are also consistent with the main estimation results. In addition, the authors found in predicting government-experienced auditor choice that family firms, domestic firms and firms that reported losses (larger firms, older firms) are more (less) likely to choose government-experienced auditors.

Research limitations/implications

This study has some limitations. The authors used a small sample to test the impact of government-experienced auditors on AQ because of data access problems. Much data used in this study were collected manually. Earnings quality was calculated using only discretionary accruals. Real activities manipulation was not used as the proxy of AQ in this paper. The findings from emerging markets might not generalize to the developed countries because the Turkish audit market is developing compared to Continental Europe or USA.

Practical implications

The findings are considered for independent audit firms. Audit firms may employ new graduates and train them to offer more qualified audit work for their clients. The results do not mean that government-experienced auditors should not work in an audit firm, or that they should not establish an audit firm. It is clear that government-experienced auditors provide low AQ in terms of audit reporting aggressiveness, audit report lag and discretionary accruals. But as they operate more in the independent audit sector, they will become successful and provide qualified audit work. One other thing we can say is that it is perhaps better for government-experienced auditors to work in the tax department of independent audit firms.

Originality/value

This paper tries to fill the gap in the literature regarding the effect of auditor experience on AQ and concentrates on a different type of experience: Auditors with government experience.

Article
Publication date: 3 September 2024

Emrah Arioglu and Murat Ocak

This paper aims to investigate whether female directors of companies are more likely to appoint audit firms (AFs) with women in high-level positions adopting monitoring…

Abstract

Purpose

This paper aims to investigate whether female directors of companies are more likely to appoint audit firms (AFs) with women in high-level positions adopting monitoring, reputation and homophily theories.

Design/methodology/approach

The paper uses ordinary least square to test the hypotheses using a unique hand-collected data set obtained from various sources. To mitigate potential endogeneity and selection bias issues, system generalized method of moments (GMM) and Heckman two-stage procedures are used. Additionally, alternative independent and dependent variables are created to strengthen the validity of main results.

Findings

The findings show that female directors are more likely to appoint AFs with women in high-level positions. Non-independent female directors, compared to independent ones, are particularly inclined to do so. These results are supported by further analyses using system GMM, Heckman two-stage procedures and alternative variables.

Originality/value

This study examines how female directors influence companies’ choices of AFs with women in high-level positions. It introduces unique audit firm governance proxies and variables specific to developing countries. The study also controls for various corporate governance, company and audit firm characteristics.

Details

Gender in Management: An International Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2413

Keywords

Article
Publication date: 5 March 2021

Murat Ocak

This study aims to contribute to the literature by offering a different sector and emphasising the importance of females in audit firm (AF) governance on audit firm performance…

Abstract

Purpose

This study aims to contribute to the literature by offering a different sector and emphasising the importance of females in audit firm (AF) governance on audit firm performance (AFP).

Design/methodology/approach

Ordinary least squares (OLS) and instrument variables regression (IVREG) with two-stage least squares are used to test the paper’s hypotheses.

Findings

Both OLS and IVREG estimation results show that both the proportion of females and gender diversity at board and owner levels and the total number of shares of female owners seem to enhance the performance of AFs.

Practical implications

These results may be important for policymakers and regulators to set a quota for women’s representation on AF governance or decide arrangements for women in AFs as in the regulations for the high hierarchical levels of other corporate firms.

Originality/value

This paper extends the current literature in the context of AFs in Turkey, positing that females in AF governance might enhance performance to a great extent.

Details

Gender in Management: An International Journal , vol. 36 no. 3
Type: Research Article
ISSN: 1754-2413

Keywords

Article
Publication date: 30 December 2020

Samet Gunay, Gökberk Can and Murat Ocak

This study aims to examine the effect of the COVID-19 pandemic in comparison to the global financial crisis (GFC) on the gross domestic product (GDP) growth rate of China.

1976

Abstract

Purpose

This study aims to examine the effect of the COVID-19 pandemic in comparison to the global financial crisis (GFC) on the gross domestic product (GDP) growth rate of China.

Design/methodology/approach

Empirical analyses are conducted through alternative methods such as ordinary least squares, Markov regime switching (MRS) and mixed data sampling (MIDAS) regressions. The flexibility of MIDAS regression enables us to use different variables with quarterly (GDP), monthly (export sales and foreign-exchange reserves) and daily frequencies (foreign exchange rates and Brent oil price).

Findings

The results indicate that the COVID-19 pandemic has had a considerable negative effect on China’s GDP growth, while the dummy variables used for the GFC are found to be insignificant. Further, the forecast accuracy test statistics exhibited a superior performance from MIDAS regression compared to the alternative models, such as MRS regression analysis. According to the forecast results, the authors expect a recovery in China’s economic growth in the second quarter of 2020.

Originality/value

This is one of the earliest studies to examine the effect of the COVID-19 pandemic on the Chinese economy, and to compare the impact of COVID-19 with the GFC. The authors provide further evidence regarding the performance of MIDAS regression analysis vs alternative methods. Findings obtained shed light on policymakers, corporations and households to update their consumption, saving and investment decisions in the chaotic environment of this pandemic.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 14 no. 1
Type: Research Article
ISSN: 1754-4408

Keywords

Article
Publication date: 7 November 2023

Md Khokan Bepari and Abu Taher Mollik

This study aims to examine whether audit partners’ gender affects the year-to-year changes (year-to-year additions and drops) of key audit matters (KAMs) identified in the audit…

Abstract

Purpose

This study aims to examine whether audit partners’ gender affects the year-to-year changes (year-to-year additions and drops) of key audit matters (KAMs) identified in the audit report. This study also examines whether female audit partners’ audit experiences, accounting education and narcissism reduce the difference in time variances of KAMs reporting between female and male audit partners. This study defines the year-to-year additions and drops of KAMs as the time variance of KAMs.

Design/methodology/approach

Data of this study includes the audit reports of Australian Securities Exchange 300 companies for the period from 2017 to 2021. This study also applies the theory of female auditors’ preference for anchoring and availability heuristics. This study uses multivariate regression with robust standard errors clustered by the firms. This study also uses several robustness tests.

Findings

The findings suggest that female audit partners disclose fewer time variant KAMs in that they have a lower tendency both to add new KAMs and to drop old KAMs. Further analysis suggests that the differences between female and male audit partners decrease as the female audit partners’ experience increases or if the female audit partner possesses a bachelor’s degree in accounting. Female audit partners’ narcissism also reduces the gender gap in the time variances of KAMs.

Practical implications

The fact that female audit partners report more stable KAMs implies that there are differences between female and male audit partners in the way audit risk assessments are conducted, audits are planned and professional judgement is applied by female and male audit partners.

Social implications

The findings imply that female audit partners’ experience, accounting education and narcissistic personality can play a significant role in explaining the differences in audit outcomes produced by male and female audit partners.

Originality/value

This study is novel in showing that female audit partners report more stable and less time-variant KAMs. The findings of this study may inform audit firms and regulators that female audit partners’ experience, tertiary qualifications in accounting and narcissistic personality traits may be effective means of reducing the gender gap in auditing. The findings also imply that auditors’ observable and unobservable personality traits affect audit outcomes.

Details

Managerial Auditing Journal, vol. 38 no. 7
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 9 August 2011

Murat Onan, Gulay Ozcan and Hakan Unal

The purpose of this paper is to develop a unique disposable bed sheet design which reduces infection risk and other related problems from patient to patient and others during…

Abstract

Purpose

The purpose of this paper is to develop a unique disposable bed sheet design which reduces infection risk and other related problems from patient to patient and others during staying period at hospitals.

Design/methodology/approach

The unique disposable bed sheet consists of three layers which are laminated to each other by hot‐melt technique. Upper and lower layers are different weights of 100 per cent polypropylene produced by spunbond technology. Plasma technology has been used to make the surface of the spunbond polypropylene sheets hydrophilic. Additionally, thermal bond 100 per cent polypropylene sheets, which have hydrophilic surfaces already due to chemical finish have been also used as upper layer. As core layer, different weights of 100 per cent viscose sheets, which have high liquid‐absorption capacity have been used. All three layers have been laminated by hot‐melt technique using etylene vinyl acetate interlayers between them. Antimicrobial effect has been achieved by the impregnation of silver and antibiotic‐based chemicals onto the hydrophilic surface of upper layers. Quality control and performance tests of all these works have been performed according to ISO and BS norms.

Findings

It is possible to have very good liquid suction capacity together with superb comfort properties, thanks to its viscose intermediate sheet and excellent wetback values. Moreover, it is initially cheap, hygienic and has enough strength against breaking and tearing.

Research limitations/implications

Cheaper antimicrobial agents and different application amounts should be checked. Also, durability of the hydrophilicity given by plasma treatment has to be checked. Additionally, dermatological tests should be applied.

Practical implications

It is expected that the infection risk at hospitals will be reduced. Moreover, hospitals will be able to use hygienic bed sheets, which would be preferable to the hospital management. Additionally, this unique design can be used for patients at home or for injured animals in veterinary clinics.

Social implications

Additional staying period due to hospital infections and infections from patient to patient/hospital personnel/visitors/other people will be reduced. Moreover, it is expected that life quality will be raised and dead ratio will be decreased. Beside this, manpower loss and increasing costs due to hospital infections will be prevented.

Originality/value

Design is new and unique. It has practical and social implications.

Details

International Journal of Clothing Science and Technology, vol. 23 no. 4
Type: Research Article
ISSN: 0955-6222

Keywords

Article
Publication date: 31 July 2020

Yener Coskun

This paper aims to offer an extensive empirical case study analysis by investigating housing affordability in Turkey as a whole, and in Istanbul, Ankara and Izmir over the period…

Abstract

Purpose

This paper aims to offer an extensive empirical case study analysis by investigating housing affordability in Turkey as a whole, and in Istanbul, Ankara and Izmir over the period of 2006 and 2017 and its sub-periods.

Design/methodology/approach

This paper develops a theoretically informed model to assess affordability using complementary methodologies in quantitative analysis. This study seeks to help outline the nature of the problem in aggregate level and in the cities; it also seeks to offer lessons about how to address measurement and modelling challenges in emergent market contexts by constructing aggregate-/city-level housing cost-to-income (HCI) ratio, adjusted HCI (AHCI) ratio, housing affordability index (HAI) and effective HAI sensitive to multiple calculation methodologies and alternative data set involving income distribution and poverty tranches.

Findings

HCI, AHCI, HAI and EHAI models generally suggest the parallel results: housing is not affordable in Turkey and in Istanbul, Ankara and Izmir except for the highest income groups. The evidence implies that besides macroeconomic instabilities, distorted interest rates and short average mortgage maturity, poverty and unequal income/wealth distributions are the main reasons of the Turkish housing affordability crisis specifically heightened in metropolitan areas such as in Istanbul.

Research limitations/implications

The evidence provides an insight on housing affordability problems in Turkey. However, small sample size and short observation period create a limit for generalisation of the findings. Further analysis would be required to illustrate how housing affordability changes in different cities of Turkey in a longer period.

Practical implications

By using empirical approaches, this paper helps to understand how serious housing affordability problems of Turkey in aggregate and urban levels. This evidence helps to explain declining ownership ratio in low-income groups and in urban areas. Reliable explanations on existing housing crisis of Turkey also help to develop affordable housing policies.

Social implications

Declining housing affordability and homeownership ratio may translate as the rising housing inequality and insecurity among Turkish households. Moreover, better affordability values of higher income groups suggest that existing inequality, economic/social segmentation, and hence social tension between high and low income groups, may further increase. In this respect, the authors suggest socially important policies such as reducing income/wealth inequalities and increasing affordable housing supply.

Originality/value

This study offers a detailed empirical case study analysis that can be used as an exemplar of how to overcome data constraints in other evolving housing market contexts. This study sets out an approach overcoming the challenges of measurement. This study also combines existing methodological approaches with the modified variables to provide a more realistic aggregate-/urban-level housing affordability picture. The authors calculated some parts of housing affordability ratio and index series using discretionary income, minimum wage and effective minimum wage to show the variations of different measurement approaches. Some constructed series are also sensitive to income distribution and poverty thresholds. Collectively, this empirical approach, developed by using emerging market data, provides a contribution to the literature.

Details

International Journal of Housing Markets and Analysis, vol. 14 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

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