Husam Aldamen and Keith Duncan
The purpose of this study is to examine the efficacy of corporate governance systems in enhancing earnings quality during the recent global financial crisis (GFC). The literature…
Abstract
Purpose
The purpose of this study is to examine the efficacy of corporate governance systems in enhancing earnings quality during the recent global financial crisis (GFC). The literature provides insight into the corporate governance–accruals quality relationship during periods of relative financial stability. However, little is known about periods of unexpected financial shocks such as the GFC.
Design/methodology/approach
The sample consists of 340 companies (1,020 firm years) listed on the ASX during 2007-2009. Factor analysis is used to compute corporate governance factors. Seemingly unrelated regression (SUR) is used to test the impact of pre-GFC corporate governance on accruals quality during the GFC.
Findings
Consistent with prior research, the findings suggest that good corporate governance is positively related to accruals quality before the GFC. More importantly, the impact of good governance intensifies during the GFC, where the mitigating role of governance is arguably under pressure. Furthermore, during the GFC, good corporate governance also affects the level of asset impairment.
Research limitations/implications
The study provides empirical evidence that the relationship between good corporate governance practices and accruals quality is amplified during the GFC. The results support the efforts of market regulators to improve the governance of companies and make them stronger during financial crises.
Originality/value
The study is an important addition to corporate governance research because it tests governance dynamics in a unique crisis period and establishes that corporate governance structures are effective when most needed.
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Iman Shaat, Husam Aldamen, Kim Kercher and Keith Duncan
The paper examines the relationship between board effectiveness and audit fees for state-owned enterprises (SOEs). Furthermore, given the unique nature of SOEs, the paper assesses…
Abstract
Purpose
The paper examines the relationship between board effectiveness and audit fees for state-owned enterprises (SOEs). Furthermore, given the unique nature of SOEs, the paper assesses country-level influences, such as economic freedom, political democracy and protection of minority shareholders, which can impact board effectiveness and audit fees.
Design/methodology/approach
A combination of two-stage and ordinary least squares regression is used to examine the board characteristics-audit fee relationship for SOEs in a multinational setting during the period from 2016 to 2018.
Findings
The results indicate that board characteristics that represent a high level of effectiveness are associated with higher audit fees in SOEs. Furthermore, the findings suggest SOE's operating in countries evidencing medium levels of democracy and economic freedom and medium to high levels of protection of minority shareholders may be motivated to reduce agency conflicts by promoting accountability and transparency, thereby demanding increasing levels of corporate governance, monitoring and audit quality, thereby increasing audit fees.
Practical implications
The results provide further support for the OECD (2015) guidelines promoting the use of high-quality external audits in SOEs.
Originality/value
As a result of the scarceness of research in this area, the current study extends the literature by examining the role of corporate governance and audit fees in SOEs, while examining the influence of economic freedom, political democracy and protection of minority shareholders.
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This study aims to bridge the gap in the scarce and inconclusive literature concerning the impact of gender diversity on earnings quality by positioning this relationship within…
Abstract
Purpose
This study aims to bridge the gap in the scarce and inconclusive literature concerning the impact of gender diversity on earnings quality by positioning this relationship within an institutional context. It aims to investigate the moderating effect of different cultural dimensions and accounting values on the relationship between board gender diversity and earnings quality.
Design/methodology/approach
The study uses an international sample from 46 countries (3,092 public firms) for the year 2017. A two-level hierarchical linear regression model is used to test the moderating effect of Hofstede’s cultural dimensions and Gray’s accounting values on diversity and accruals quality relationship.
Findings
The findings suggest a positive relationship between board gender diversity and earnings quality. Results hold valid after controlling for endogeneity effect. More importantly, regarding national culture, results indicate that power distance, individualism, uncertainty avoidance, professionalism, uniformity, secrecy and conservatism moderate the relationship between female directors and accruals quality. Furthermore, different levels of female representation are essential on boards of different societies to use the benefits of gender-diversified boards in enhancing earnings quality.
Research limitations/implications
The study provides empirical evidence on the effectiveness of various worldwide movements toward increasing board gender diversity. Additionally, the results speak directly to gender quota regulatory bodies suggesting that “no size fits all” for gender quota requirement.
Originality/value
The study contributes to the stream of literature concerning gender diversity and earnings quality by investigating this relationship through the lens of national culture and emphasizing the importance of considering institutional factors in examining social interactions.
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Husam Aldamen, Keith Duncan and Jennifer L. Ziegelmayer
Due to its technical focus, the introductory accounting course has a hierarchical knowledge structure that requires students to master and integrate abstract knowledge which…
Abstract
Purpose
Due to its technical focus, the introductory accounting course has a hierarchical knowledge structure that requires students to master and integrate abstract knowledge which builds on itself over time. The purpose of this paper is to explore the relationship between engagement and examination performance for students enrolled in a hierarchically structured course.
Design/methodology/approach
This research involves a retrospective study of an introduction to accounting course examining the relationship between increased engagement and examination performance. Students are provided opportunities for engagement through assigned homework and optional ungraded assignments. Performance is measured by scores on each of three examinations conducted throughout the semester.
Findings
The study finds that additional engagement in assignments has no significant impact on mid-semester examination performance; however, sustained engagement throughout the semester has a cumulative impact on final examination performance. Moreover, students that perform well on mid-semester examinations do not benefit from additional engagement, whereas students that perform poorly on the mid-semester examinations exhibit substantially higher final examination scores from sustained engagement.
Practical implications
This study illustrates the complex interplay between engagement and performance and the timing of performance gains. The implication for educators is that increased sustained engagement is likely to result in increased but delayed student performance gains in disciplines with hierarchical knowledge structures.
Originality/value
This study contributes to the literature in its examination of the timing of performance benefits gained from increased engagement in courses with a cumulative knowledge base.
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Husam Aldamen and Keith Duncan
The purpose of this paper is to extend the growing body of literature on the impact of corporate governance on debt contracting by examining if better governance is associated…
Abstract
Purpose
The purpose of this paper is to extend the growing body of literature on the impact of corporate governance on debt contracting by examining if better governance is associated with access to interest bearing debt. The paper aims to explore whether no‐debt companies have governance structures that are qualitatively different to debt companies within a market with a distinct corporate finance structure, such as Australia.
Design/methodology/approach
The analysis is portioned into two stages. The first stage focuses on univariate analysis which includes descriptive statistics and analysis of variance (ANOVA). The second stage introduces multivariate analysis, in the form of a probit regression model, to test the relationship between corporate governance and access to interest bearing debt.
Findings
The results suggest that companies with higher levels of corporate governance are more likely to access interest bearing debt relative to no‐debt companies. However, the unexpected finding is that only resource companies that implement higher governance are more likely to access interest bearing debt. The core driver is that resource companies with no‐debt have systematically lower governance than all other companies.
Research limitations/implications
The cross – sectional design of the study is limited in its ability to shed light on the question of causality. One potential avenue is to develop an event study around the timing of governance and debt access changes.
Originality/value
The paper contributes to the extant literature by investigating the relationship between governance and access to interest bearing debt in the understudied Australian debt market.