Impact of corporate governance mechanisms on financial reporting quality: a study of Indian GAAP and Indian Accounting Standards

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The present study examines the impact of corporate governance mechanisms on financial reporting quality under Indian GAAP and Indian Accounting Standards (Ind. AS). A sample of 97 companies listed on the Bombay Stock Exchange is selected. Corporate governance mechanisms have been considered as independent variables, and financial reporting quality is the dependent variable. Corporate governance is measured by board effectiveness (board size, independence, diligence, and expertise), audit committee attributes (size, independence, diligence, and expertise), foreign ownership, and audit quality. Descriptive statistics, correlation, and OLS regression are conducted to estimate the results. The study results reveal that board characteristics and audit committee attributes, except for audit committee diligence, have a significant effect on financial reporting quality. However, the impact of board diligence and audit committee attributes is negative. Foreign ownership has no contribution to financial reporting quality, but audit quality has a significant effect. The findings of the study have considerable implications for regulators, policymakers, managers, investors, analysts, and academicians. More emphasis should be given to compliance with Ind. AS, and an oversight body for compliance with Ind. AS should be established.

Acknowledgment
This publication was supported by Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

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    • Figure 1. Research model
    • Figure 2. Descriptive statistics for CG attributes
    • Table 1. Descriptive statistics of CG attributes
    • Table 2. OLS regression analysis
    • Table 3. Accounting standards wise OLS regression analysis
    • Table A1. Operational definition of variables
    • Conceptualization
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed, Mohd Shamim, Waleed M. Al-ahdal
    • Data curation
      Faozi A. Almaqtari
    • Formal Analysis
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed
    • Investigation
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed, Mohd Shamim
    • Methodology
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed, Mohd Shamim, Waleed M. Al-ahdal
    • Project administration
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed
    • Supervision
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed
    • Validation
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed, Mohd Shamim, Waleed M. Al-ahdal
    • Writing – original draft
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed, Waleed M. Al-ahdal
    • Writing – review & editing
      Faozi A. Almaqtari, Abdulwahid Abdullah Hashed, Mohd Shamim, Waleed M. Al-ahdal
    • Visualization
      Abdulwahid Abdullah Hashed, Waleed M. Al-ahdal