Soad Moussa Tantawy and Tantawy Moussa
This paper aims to examine how different types of corporate political connections (PCs) affect auditor choice decisions (and, therefore, audit quality) and audit opinions…
Abstract
Purpose
This paper aims to examine how different types of corporate political connections (PCs) affect auditor choice decisions (and, therefore, audit quality) and audit opinions following the 2013 Egyptian uprising.
Design/methodology/approach
This paper utilizes a unique hand-collected dataset on the type of PCs of Egyptian listed companies from 2014 to 2019. Several analyses are employed to test the hypotheses, including logit regression, probit regression and generalized linear mixed models (GLMM). A number of additional analyses are conducted to ensure the robustness of the results, including the instrumental variables (IVs) probit models and propensity score matching (PSM).
Findings
The results show that firms' choice of auditor and audit opinion is heavily influenced by firms' PCs. Companies with PCs through boards of directors and major shareholders hire Big 4 audit firms to enhance corporate legitimacy; however, government-linked companies usually retain non-Big 4 audit firms to avoid increased transparency and to conceal improper activities, including tunneling and rent-seeking. Further, the results indicate that companies with PCs through boards of directors or major shareholders are more likely to receive favorable audit opinions, whereas government-owned businesses are less likely to receive such opinions.
Research limitations/implications
This study provides additional evidence to policymakers that binding regulations and guidelines are necessary to oversee politically connected firms (PCFs) and to enhance governance and investor protection.
Originality/value
This study provides the first empirical evidence on how corporate PCs influence the choice of auditors and the opinions of audit firms in Egypt. This paper also sheds light on the impact of different types of corporate PCs on the choice of auditors and audit opinions.
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Abdelhafid Benamraoui, Tantawy Moussa and Mostafa Hussien Alsohagy
This paper aims to investigate the disparity and compliance of information disclosures in Islamic banks (IBs). Specifically, the research examines IBs’ compliance with Sharia…
Abstract
Purpose
This paper aims to investigate the disparity and compliance of information disclosures in Islamic banks (IBs). Specifically, the research examines IBs’ compliance with Sharia disclosure requirements.
Design/methodology/approach
To determine the extent of disclosures and compliance with Islamic business principles, content analysis is applied to the annual reports of a sample of IBs from 11 countries. A comprehensive reporting framework has also been developed to assess the transparency and compliance of IBs with Islamic business principles. Institutional theory and core Islamic principles are used to inform the study and its findings.
Findings
The results reveal that IBs demonstrate limited transparency on the key Sharia compliance issues, and there is a wide variation in the level of reporting across the countries studied. Moreover, the authors find that IBs located in the single integrated regulatory framework (RF) countries disclose more information, followed by those located in dual RF countries and then those located in Islamic RF countries.
Originality/value
This study presents a unique and comprehensive framework to assess the areas of Sharia disclosure by IBs and provides a conceptual rationing for the actual level of IBs’ Sharia reporting. This study also fills a significant gap in the literature, as most studies in this field are based on a single-country study. The results are deemed of direct relevance to IBs’ managers, investors, policymakers, regulators and the wider public, particularly in the Muslim world.
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Taha Almarayeh, Radhi Al-Hamadeen, Ahmad Alshira’h, Abd Alwali Lutfi Khassawneh, Hala Zaidan and Omar Mowafi
The purpose of this paper is to examine the relationship between political connections, audit quality and firm performance.
Abstract
Purpose
The purpose of this paper is to examine the relationship between political connections, audit quality and firm performance.
Design/methodology/approach
The sample of this investigation was sourced from 51 industry-listed firms on the Amman Stock Exchange (ASE) from 2009 to 2022. Ordinary least squares regression was used to investigate the association between political connections, audit quality and firm performance. Generalized least squares estimation method was used to verify that the outcomes are robust.
Findings
The study finds that listed companies with political connections have better performance than those without such ties. The findings also suggest that politically connected firms would prefer higher-quality financial reporting and, hence, appoint Big 4 auditors.
Originality/value
To the best of the authors’ knowledge, this analysis is one of the first to explore the relationship between political connections, audit quality and firm performance in Jordan. By documenting the role of Big 4 auditor as a motivating factor for politically connected firms to enhance firm performance, this paper enriches the political connection and auditor choice literature.
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Arash Arianpoor and Mahla Khiyabani
The present study aims to investigate the impact of the auditor’s opinion and internal control quality (ICQ) on future abnormal cash holdings for companies listed on the Tehran…
Abstract
Purpose
The present study aims to investigate the impact of the auditor’s opinion and internal control quality (ICQ) on future abnormal cash holdings for companies listed on the Tehran Stock Exchange (TSE).
Design/methodology/approach
Information about 216 companies in 2014–2021 was examined. This study used the absolute value of abnormal cash holdings to test the research hypotheses. However, future extra abnormal cash holdings and future deficit abnormal cash holdings were also tested. Modified multiple regression method and ordinary least squares (OLS) were used. The present study also applied the generalized method of moments (GMM) for endogeneity concerns.
Findings
The results showed that an unqualified audit opinion negatively and significantly affects a firm’s future abnormal cash holdings. Moreover, ICQ significantly strengthens the impact of an unqualified audit opinion on a firm’s future abnormal cash holdings. These results remained robust even after several robustness tests. This study tested the robustness of results through data division into the pre-COVID-19 and post-COVID-19 years. The test confirmed previous findings; however, the strength of these effects decreased in post-COVID-19 years.
Originality/value
Previous studies could not answer how an auditor’s opinion affects a company’s future abnormal cash holdings. Moreover, no empirical study has addressed the moderator role of ICQ in the relationship between unqualified audit opinion and future abnormal cash holdings. This study helps stakeholders evaluate the performance of firms more accurately, especially in any global health crisis such as the COVID-19 pandemic and similar crises. Combined with the research findings from developed countries, this study can potentially contribute to the global community’s efforts in advancing international objectives.
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Tasneem Mustun and Effiezal Aswadi Abdul Wahab
The paper aims to investigate the impact of political connections and board ethnicity on the value relevance of earnings and book value in Mauritius.
Abstract
Purpose
The paper aims to investigate the impact of political connections and board ethnicity on the value relevance of earnings and book value in Mauritius.
Design/methodology/approach
This study is based on a sample of 541 Mauritian-listed firm-year observations for 2001–2016. Financial and board diversity data have been collected using the listed firms’ annual reports and from reports published by the Stock Exchange of Mauritius. Political connection data was derived from the directory of Chief of State and Cabinet members. The research hypotheses were empirically tested using a modified Ohlson (1995) price model.
Findings
This study shows that political connections negatively impact the value relevance of earnings and book value. The authors find that firms with Franco-Mauritian directors will constrain political connections’ negative impact. The authors find contrasting results for Indo-Mauritian directors since they form an integral part of the government in Mauritius.
Originality/value
This study contributes to the scarce accounting literature in Mauritius. Firstly, no study has investigated the relationship between the value relevance of accounting information and political connections in Mauritius. Secondly, Mauritius’s capital market is dominated by a non-indigenous ethnic group, Franco-Mauritians, who remain the economic elite. Hence, Mauritius presents an opportunity to bring forth another important aspect in the capital market and corporate governance; diversity on the board of directors. Therefore, the study extends to the political connections and board diversity literature.
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Sri Pujiningsih, Ani Wilujeng Suryani, Ika Putri Larasati and Sharifah Norzehan Syed Yusuf
This study aims to discover the role of accounting and media in hegemonic discourse for divestment valuation of PT Freeport Indonesia shares.
Abstract
Purpose
This study aims to discover the role of accounting and media in hegemonic discourse for divestment valuation of PT Freeport Indonesia shares.
Design/methodology/approach
This study employs data from 608 news articles from 5 national media. This study uses Gramsci's concept of hegemony and Laclau and Mouffe's hegemonic discourse to explore the ideological role of accounting in the formation of historical blocs and investigate the contestants' discursive strategies through the chains of equivalence and difference.
Findings
The incumbent presidential candidate, by involving political and intellectual actors, has succeeded in taking over and shifting PT Freeport Indonesia's hegemony to maintain its power, through the ideology of divestment and accounting. The media played a role in the victory of the pro-divestment bloc in the hegemonic divestment discourse contest. The pro-divestment bloc's discursive strategy uses more formal and technical language styles than the anti-divestment bloc, which uses informal language styles. The pro-divestment bloc uses the key signifiers of low price, improved financial performance, nationalization and welfare, as opposed to the anti-divestment bloc, with the key signifiers of high price, declining financial performance and neoliberalist colonization.
Practical implications
The implications of this research may encourage accounting academics to contribute to emancipatory social movements in the struggle for hegemony. The implication for policy makers is the importance of involving the public, intellectual actors, political actors and the media in supporting diverse state strategic policies in the national interest.
Originality/value
This paper contributes to Gramsci's theory of hegemony and Laclau and Mouffe's hegemonic discourse to understand the role of accounting and media in a nationalization project as an emancipatory social movement, as well as a hegemonic shifting political movement.
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This paper analyses the Mohammed cartoons controversy, the boycott of Danish products in the Middle East, and the consequences for the Danish companies involved.
Abstract
Purpose
This paper analyses the Mohammed cartoons controversy, the boycott of Danish products in the Middle East, and the consequences for the Danish companies involved.
Design/methodology/approach
The objectives have been achieved by means of a ideology‐critical discourse analysis of Danish newspaper articles on the subject.
Findings
The wider ramifications of an insult and freedom of expression discourse are shown. Managerial consequences of the boycott are outlined for Jyllands‐Posten and Arla Foods.
Originality/value
The paper is of value for researchers and managers who want to understand the politicisation of markets and the major consequences for management and marketing strategy.
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Amin Shaqrah and Ahmad Alzighaibi
The purpose of this study is to investigate the knowledge management capabilities (KMCAP) in enterprise systems value-adding processes (ENTVA) through the big data capabilities…
Abstract
Purpose
The purpose of this study is to investigate the knowledge management capabilities (KMCAP) in enterprise systems value-adding processes (ENTVA) through the big data capabilities (BDCAP) spectrum.
Design/methodology/approach
The proposed framework model is quantitatively tested using the Smart PLS method. An online questionnaire is developed and distributed to 120 technicians and knowledge workers in the royal commission for Yanbu industry (RCYI).
Findings
The findings of this study conclude that KMCAP has a significant direct effect on ENTVA and BDCAP. Also, this study concludes with interesting findings on the KMCAP domains.
Research limitations/implications
The study findings propose a wide-ranging awareness of knowledge management processes and BDCAP in the industrial enterprise systems environment. Future studies should consider other variables and different sectors and contexts.
Practical implications
This study includes implications for the full mediation effect of BDCAP between KMCAP and ENTVA.
Originality/value
This study demonstrates the relationship between three vital processes of KMCAP “knowledge management acquisition, knowledge management sharing and knowledge management emission” and ENTVA mediates by BDCAP in the context of the RCYI in Saudi Arabia.
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Years after the 2011 uprising Egypt, it seems that the country’s non-Islamist parties are still included in the political game. After significant alterations in their political…
Abstract
Purpose
Years after the 2011 uprising Egypt, it seems that the country’s non-Islamist parties are still included in the political game. After significant alterations in their political sphere by mid-2013 at the advent of the Muslim Brother exclusion and the subsequent discrediting of Salafi al-Nour party, non-Islamist parties took clear part in the mobilization for presidential elections (2014, 2018) and competed for legislative seats in 2015. Nonetheless, it is difficult to expect them to turn into long-term key political players with clear-cut ideological postures, unique platforms and strong grass root mobilization. With the exception of the electoral gains scored by numbered parties like Free Egyptians’ party and Nation’s Future in 2015 legislative elections, these parties seem to be lagging behind esp. in terms of their popular base; who became winners at the advent of the radical exclusion of the MB from July 2013 onwards.
Design/methodology/approach
This paper is based on archival research and guided by basic assumptions of rational choice institutionalism, mainly game-theoretic versions of the approach. It is divided into four sections, three of them are chronological and the last one is thematic.
Findings
Egypt’s non-Islamists engaged in the post-2011 political sphere, with strong Islamist rivals crippling their political chances in the first two years following the 2011 uprising. They surely capitalized on the exclusion and discrediting of the latter, but they suffered lack of ideological clarity and fragmentation from 2011 onwards with no enough evidence these weaknesses were surpassed after Islamists were “out of their way”. The only strand of non-Islamist parties which came out as “game winners” were those possessing the resources and enjoying overt “friendly” relations with al-Sisi regime. Nonetheless, internal conflicts inside key secularist parties shed light on their capacity to turn into long-term players in Egypt’s political sphere.
Originality/value
Very few papers were published on Egypt’s secularists parties after the 2011 uprising from the perspective of the alteration that occurred in their political environment affecting their political weight and gains. More generally, literature on non-ruling parties in authoritarian contexts mostly reduce these parties to secondary roles allocated by ruling regimes. The paper seeks to overcome both shortages.