Abstract This paper addresses the question whether voluntary adoption of International Financial Reporting Standards (IFRS) is associated with lower earnings management. Ball et al. (Journal of Accounting and Economics, 36(1–3), pp. 235–270, 2003) argue that adopting high quality standards might be a necessary condition for high quality information, but not necessarily a sufficient one. In Germany, a code-law country with low investor protection rights, a relatively large number of companies have chosen to voluntarily adopt IFRS prior to 2005. We investigate whether German companies that have adopted IFRS engage significantly less in earnings management compared to German companies reporting under German generally accepted accounting principles (GAAP), while controlling for other differences in earnings management incentives. Our sample, consisting of German listed companies, contains 636 firm-year observations relating to the period 1999–2001. Our results suggest that IFRS-adopters do not present different earnings management behavior compared to companies reporting under German GAAP. These findings contribute to the current debate on whether high quality standards are sufficient and effective in countries with weak investor protection rights. They indicate that voluntary adopters of IFRS in Germany cannot be associated with lower earnings management.

Earnings Management underGerman GAAP versus IFRS

Corporate governance: the international journal of business in society

https://dspace.stir.ac.uk/bitstream/1893/10434/1/THE%20EXTENT%20OF%20CORPORATE%20GOVERNANCE%20DISCLOSURE%20AND%20ITS%20DETERMINANTS%20IN%20A%20DEVELOPING%20MARKET%20THE%20CASE%20OF%20EGYPT.pdf

The extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt

This study analyses the effect of board diversity (gender and nationality) on performance in banks. By making use of a sample of 159 banks in nine countries during the period 2004–2010, our empirical evidence shows that gender diversity increases bank performance, while national diversity inhibits it. Complementarily, according to their institutional characteristics, we also show the moderating effect of investor protection and bank regulatory regime on this previous relationship, analysing their substitution or complementary roles. Our results also suggest that these institutional factors play a significant role in these effects. They show that in contexts of weaker regulatory and lower investor protection environments, board diversity has less influence on the performance of banks.

Board diversity and its effects on bank performance: An international analysis

https://isiarticles.com/bundles/Article/pre/pdf/14651.pdf

The value relevance of disclosure: Evidence from the emerging capital market of Egypt

This paper examines the level and determinants (i.e. ownership structure, board composition and audit committee presence) of voluntary corporate disclosure in the annual reports of the largest 100 companies listed on the Egyptian stock exchange (EGX). Our results indicate that overall voluntary disclosure was low at just 13.43% with a large variation range. This score places Egypt at a lower level than other emerging capital markets (e.g. Singapore, Hong Kong and Malaysia). The variances of these results support the need for individual country level studies and comparative analysis. Multivariate results show audit committee presence as the most significant variable influencing voluntary disclosure. Also, companies with a higher ratio of independent non-executive directors have a higher extent of voluntary disclosure. It was also evidenced that voluntary disclosure increases with decreases in block-holder ownership. Results show that two other ownership aspects – managerial and government – are not related to voluntary disclosure. Finally, the analysis shows profitability and internationality significantly impact voluntary disclosure. On the other side, that number of shareholders, type of auditor, size, liquidity, leverage and industry type of the firm do not affect the extent of voluntary disclosure.

An empirical analysis of corporate governance structures and voluntary corporate disclosure in volatile capital markets: the Egyptian experience

The conflict between IAS disclosure requirements and the secretive culture in Egypt

Purpose – The purpose of this study is to examine the impact of corporate governance attributes of listed Egyptian companies on the propensity (adoption) and comprehensiveness (quality) of corporate internet reporting (CIR) practices.Design/methodology/approach – This study uses archival data from the largest (top) 100 listed companies on the Egyptian Stock Exchange (EGX 100). Corporate governance attributes are captured by ownership structure (free float, managerial ownership, government ownership) and board of directors' structure (board size, board independence, CEO‐chair duality). Empirical models are used to estimate the effects of these attributes on the propensity, content, presentation, and overall comprehensiveness of CIR.Findings – The results of this study indicate mixed effects of governance attributes on the choice to adopt CIR and its quality. The results from the Binary Logistic Regression suggest that Egyptian companies with greater (less) ownership dispersion, managerial ownership, govern...

Propensity and Comprehensiveness of Corporate Internet Reporting in Egypt :Do Board Composition and Ownership Structure Matter?

Purpose – This study examines the factors influencing Corporate disclosure transparency as measured by the level of voluntary disclosure (VD) in the annual reports of the active share trading firms in Egypt.

Design/methodology/approach – The design and research method are empirical using archival data to collect information on the dependent variable (VD) and independent variables (corporate governance characteristics and company characteristics). A transformed multiple ordinary least squares (OLS) regression model was used to test the association between the dependent variable of VD and the independent variables.

Findings – The findings indicate that the extent of VD is affected by the highly secretive Egyptian culture. This implies that the introduction of a new corporate governance code has not improved information symmetry as the overall level of VD is very low at just 19.38%. In addition, several corporate governance and company characteristics variables were found significant in explaining levels of VD by the sample companies.

Research limitations – The findings have generalizability limitations as the study focuses only on the actively traded companies operating in the Egyptian stock market.

Practical implications – The results of this study should alarm the regulators and financial investors from the quality of financial information being provided in the Egyptian market. These results are more alarming since the investigated companies are the top 30 actively traded companies on the Egyptian Stock Exchange (EGX). It is logically expected that the status of disclosure would be lower in the other less actively traded companies on EGX.

Originality/value – This study provides evidence regarding three variables, for the first time in Egypt, namely “ownership structure” and “number of independent directors on the board” and “existence of audit committees” as explanatory variables of the level of VD. This research study will stimulate further research in understanding the importance of the role of corporate governance in promoting more transparency in other emerging economies and the need to build models that include country level factors to explain the level of VD.

Khaled Dahawy

Papers

The extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt

An empirical analysis of corporate governance structures and voluntary corporate disclosure in volatile capital markets: the Egyptian experience

The conflict between IAS disclosure requirements and the secretive culture in Egypt

Propensity and Comprehensiveness of Corporate Internet Reporting in Egypt :Do Board Composition and Ownership Structure Matter?

Factors Influencing Corporate Disclosure Transparency in the Active Share Trading Firms: An Explanatory study