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Article
Publication date: 10 April 2017

Waleed M. Albassam and Collins G. Ntim

The study aims to examine the effect of Islamic values on the extent of voluntary corporate governance (CG) disclosure. In addition, the authors investigate the effect of…

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Abstract

Purpose

The study aims to examine the effect of Islamic values on the extent of voluntary corporate governance (CG) disclosure. In addition, the authors investigate the effect of traditional ownership structure and CG mechanisms on the extent of voluntary CG disclosure.

Design/methodology/approach

The authors distinctively construct Islamic values and voluntary CG disclosure indices using a sample of 75 Saudi-listed firms over a seven-year period in conducting multivariate regressions of the effect of Islamic values on the extent of voluntary CG disclosure. The analyses are robust to controlling for firm-level characteristics, fixed-effects, endogeneities and alternative measures.

Findings

The authors find that corporations that depict greater commitment towards incorporating Islamic values into their operations through high Islamic values disclosure index score engage in higher voluntary CG disclosures than those that are not. Additionally, the authors find that audit firm size, board size, government ownership, institutional ownership and the presence of a CG committee are positively associated with the level of voluntary CG disclosure, whereas block ownership is negatively associated with the extent of voluntary CG disclosure.

Practical implications

The study has clear practical implications for future research, practice and broader society by demonstrating empirically that corporations that voluntarily incorporate Islamic values into their operations are more likely to be transparent about their CG practices and thereby providing new crucial insights on the effect of Islamic values on voluntary CG compliance and disclosure.

Originality/value

This is the first empirical attempt at explicitly examining the effect of Islamic values on the extent of voluntary CG disclosure. The authors also offer evidence on the effect of traditional CG and ownership structures on the extent of voluntary CG disclosure.

Details

Journal of Islamic Accounting and Business Research, vol. 8 no. 2
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 2 May 2017

Mohamed I. Elghuweel, Collins G. Ntim, Kwaku K. Opong and Lynn Avison

The purpose of this paper is to examine the impact of corporate (CG) and Islamic (IG) governance mechanisms on corporate earnings management (EM) behaviour in Oman.

1942

Abstract

Purpose

The purpose of this paper is to examine the impact of corporate (CG) and Islamic (IG) governance mechanisms on corporate earnings management (EM) behaviour in Oman.

Design/methodology/approach

The authors employ one of the largest and extensive data sets to-date on CG, IG and EM in any developing country, consisting of a sample of 116 unique Omani listed corporations from 2001 to 2011 (i.e. 1,152 firm-year observations) and a broad CG index containing 72 CG provisions. The authors also employ a number of robust econometric models that sufficiently account for alternative CG/EM proxies and potential endogeneities.

Findings

First, the authors find that, on average, better-governed corporations tend to engage significantly less in EM than their poorly governed counterparts. Second, the evidence suggests that corporations that depict greater commitment towards incorporating Islamic religious beliefs and values into their operations through the establishment of an IG committee tend to engage significantly less in EM than their counterparts without such a committee. Finally and by contrast, the authors do not find any evidence that board size, audit firm size, the presence of a CG committee and board gender diversity have any significant relationship with the extent of EM.

Originality/value

To the best of the authors’ knowledge, this is a first empirical attempt at examining the extent to which CG and IG structures may drive EM practices that explicitly seek to draw new insights from a behavioural theoretical framework (i.e. behavioural theory of corporate boards and governance).

Details

Journal of Accounting in Emerging Economies, vol. 7 no. 2
Type: Research Article
ISSN: 2042-1168

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