IFRS Adoption, Corporate Governance, and Information Quality: Evidence From KSA

Q3 Business, Management and Accounting

International Journal of Business Governance and Ethics Pub Date : 2023-07-07 DOI:10.51325/ijbeg.v6i1.109

Fatma Zehri, Norah Alrumayyan, Noha Alzeaagi

{"title":"IFRS Adoption, Corporate Governance, and Information Quality: Evidence From KSA","authors":"Fatma Zehri, Norah Alrumayyan, Noha Alzeaagi","doi":"10.51325/ijbeg.v6i1.109","DOIUrl":null,"url":null,"abstract":"This research aims to predict the effectiveness of implementing International Financial Reporting Standards (IFRS) in reducing earnings management in Saudi Arabia (KSA). Considering that earnings management is influenced by various factors, we also propose examining the impact of corporate governance strength on enhancing the reliability of accounting information. Empirical results are obtained from a sample of 51 Saudi listed firms observed from 2014 to 2020. Discretionary accruals (DA) are utilized to identify earnings management, estimated using Dechow et al.'s (1995) model. Subsequently, a multivariate regression analysis is conducted to explore the relationship between DA, IFRS adoption, and corporate governance structure. The main findings indicate that the independence of both the boards of directors and the audit committee has a significant negative impact on earnings management in Saudi industrial companies. However, the size of the board, the size of the audit committee, and the frequency of audit committee meetings do not appear to have a significant effect on DA. Therefore, we suggest that certain mandatory measures should be implemented to enhance the effectiveness of corporate governance mechanisms in a developing economy like Saudi Arabia (KSA).","PeriodicalId":35452,"journal":{"name":"International Journal of Business Governance and Ethics","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Business Governance and Ethics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.51325/ijbeg.v6i1.109","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Business, Management and Accounting","Score":null,"Total":0}

引用次数: 0

Abstract

This research aims to predict the effectiveness of implementing International Financial Reporting Standards (IFRS) in reducing earnings management in Saudi Arabia (KSA). Considering that earnings management is influenced by various factors, we also propose examining the impact of corporate governance strength on enhancing the reliability of accounting information. Empirical results are obtained from a sample of 51 Saudi listed firms observed from 2014 to 2020. Discretionary accruals (DA) are utilized to identify earnings management, estimated using Dechow et al.'s (1995) model. Subsequently, a multivariate regression analysis is conducted to explore the relationship between DA, IFRS adoption, and corporate governance structure. The main findings indicate that the independence of both the boards of directors and the audit committee has a significant negative impact on earnings management in Saudi industrial companies. However, the size of the board, the size of the audit committee, and the frequency of audit committee meetings do not appear to have a significant effect on DA. Therefore, we suggest that certain mandatory measures should be implemented to enhance the effectiveness of corporate governance mechanisms in a developing economy like Saudi Arabia (KSA).

查看原文本刊更多论文

采用国际财务报告准则、公司治理和信息质量:来自KSA的证据

本研究旨在预测实施国际财务报告准则(IFRS)在减少盈余管理在沙特阿拉伯(KSA)的有效性。考虑到盈余管理受多种因素的影响，我们也建议研究公司治理强度对提高会计信息可靠性的影响。实证结果来自2014年至2020年对51家沙特上市公司的观察样本。可支配性应计利润(DA)被用来识别盈余管理，使用Dechow等人(1995)的模型进行估计。随后，进行多元回归分析，探讨数据披露、采用国际财务报告准则与公司治理结构之间的关系。主要研究结果表明，董事会和审计委员会的独立性对沙特工业公司的盈余管理有显著的负面影响。然而，董事会的规模、审计委员会的规模和审计委员会会议的频率似乎对DA没有显著影响。因此，我们建议在沙特阿拉伯(KSA)这样的发展中经济体实施某些强制性措施，以提高公司治理机制的有效性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

International Journal of Business Governance and Ethics Business, Management and Accounting-Business and International Management

CiteScore

1.90

自引率

0.00%

发文量

期刊介绍： Issues of governance, responsibility and accountability are becoming increasingly important as the world, simultaneously, becomes dominated by corporations, interconnected via forces of globalisation and transparent through heightened media attention and the rise in internet-led democracy. Companies, and in particular leaders of business, can no longer hide from their responsibilities to wider stakeholder community by claims of ignorance of corporate malpractices and of failure. Boards of directors are being increasingly made responsible for both the successes and failures of their companies, as well as their own conduct and behaviours. Actions of business have increasingly become a concern not just for shareholders but also for the wider community at large.