Regulatory changes and reporting quality: the moderating role of firm characteristics
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Received November 15, 2018;Accepted February 8, 2019;Published April 19, 2019
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DOIhttp://dx.doi.org/10.21511/ppm.17(2).2019.03
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Article InfoVolume 17 2019, Issue #2, pp. 32-50
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Cited by6 articlesJournal title: Cogent Business & ManagementArticle title: Board governance mechanisms and sustainability reporting quality: A theoretical frameworkDOI: 10.1080/23311975.2020.1771075Volume: 7 / Issue: 1 / First page: 1771075 / Year: 2020Contributors: Elaigwu Moses, Ayoib Che-Ahmad, Salau Olarinoye Abdulmalik, Collins G. NtimJournal title: African Journal of Economic and Management StudiesArticle title: Regulatory changes and audit fees: the moderating effect of overlapping directorship and financial reporting qualityDOI: 10.1108/AJEMS-04-2019-0158Volume: 12 / Issue: 1 / First page: 90 / Year: 2021Contributors: Salau Olarinoye Abdulmalik, Ayoib Che-AhmadJournal title: Journal of Financial Reporting and AccountingArticle title: Chief executive officer retirement and auditor’s risk assessmentDOI: 10.1108/JFRA-04-2019-0052Volume: 18 / Issue: 2 / First page: 343 / Year: 2020Contributors: Salau Olarinoye Abdulmalik, Noor Afza Amran, Ayoib Che-AhmadJournal title: Corporate Social Responsibility and Environmental ManagementArticle title: Sustainability reporting quality in Malaysia: The intricacy of family controlled and politically connected firmsDOI: 10.1002/csr.2799Volume: 31 / Issue: 5 / First page: 4190 / Year: 2024Contributors: Moses Elaigwu, Salau Olarinoye Abdulmalik, Abdelkader Alghorbany, Ayoib Che‐AhmadJournal title: Asia-Pacific Journal of Business AdministrationArticle title: Corporate integrity, external assurance and sustainability reporting quality: evidence from the Malaysian public listed companiesDOI: 10.1108/APJBA-07-2021-0307Volume: 16 / Issue: 2 / First page: 410 / Year: 2024Contributors: Moses Elaigwu, Salau Olarinoye Abdulmalik, Hassnain Raghib TalabJournal title: Journal of International Accounting, Auditing and TaxationArticle title: Abnormal audit fees and financial reporting quality: A meta-analysisDOI: 10.1016/j.intaccaudtax.2024.100622Volume: 55 / Issue: / First page: 100622 / Year: 2024Contributors: Xuelian Li, Ming Liu
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The objective of this study is to investigate the effect of regulatory changes on financial reporting quality and audit fees and to further test whether this effect was moderated by firm characteristics (i.e. abnormal audit fees, political connections and overlapping directorship) in Nigeria. This study utilized the data of 90 companies listed on the Nigerian stock exchange over the period 2008–2013. Using Generalized Method of Moments (GMM) technique that takes into account the endogeneity nature of financial reporting quality and audit fees model, the results indicated that financial reporting quality improved in the regulatory changes period. However, abnormal audit fees, political connection and overlapping directorship deteriorated the effect. Accordingly, future regulatory reforms must be cognizant of these factors. Even though there are abundant empirical studies on financial regulatory changes and their effects on financial reporting quality, this study provides additional insights into the regulatory change literature by investigating how firm characteristics (abnormal audit fees, political connection and overlapping directorship) moderate the effect of regulatory changes particularly in Nigeria, one of the less developed and underresearched capital markets in the world. Further, the findings of this study are robust with respect to the issues of unobserved heterogeneity and endogeneity, which previous studies had failed to consider.
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JEL Classification (Paper profile tab)M42
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References72
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Tables6
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Figures0
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- Table 1. Sample selection table
- Table 2. Variable description table
- Table 3. Industry classification
- Table 4. Descriptive statistics of the regression variables for the financial reporting quality model
- Table 5. The Durbin-Wu-Hausman test for endogeneity of regressors
- Table 6. Financial reporting quality regression model
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Earnings management and impression management: European evidence
Problems and Perspectives in Management Volume 20, 2022 Issue #1 pp. 459-472 Views: 786 Downloads: 444 TO CITE АНОТАЦІЯThis study explores the relationship between Earnings Management and Impression Management in the context of some European listed companies. The analysis focuses on the readability of annual reports, measured by the file size. Earnings management is assessed using the modified Jones model. The sample consists of 2,953 listed companies from 17 industries of 24 European countries between 2012 and 2018 resulting in 13,020 firm-year observations. It has been found that one standard deviation increase in financial reports file size increases discretionary accruals in around 4%. These results are robust across different sample specifications in terms of firms’ size, industry and country. The findings show that increased intensity in the use of discretionary accruals is obfuscated by the disclosure of less readable annual reports, implying that Earnings Management and Impression Management are used complementarily. The conclusions have impact both for investment management and for policy, preventing inefficient allocation of capital budgeting and providing additional information that improves regulation on financial reporting transparency.
Acknowledgment
The authors are grateful to financial support from FCT – Fundação para a Ciência e Tecnologia (Portugal), national funding through research grant (UID/SOC/04521/2020).