Does Corporate Governance affect Earnings Quality: Preliminary Evidence from an Emerging Market

A T Business Review, 7(3), 48-57, 2011

12 Pages Posted: 18 Dec 2010 Last revised: 26 Dec 2017

See all articles by Noor Houqe

Noor Houqe

School of Accountancy

Tony van Zijl

Victoria University of Wellington - Faculty of Commerce and Administration

Keitha L. Dunstan

Bond University - School of Business

A.K.M. Waresul Karim

Saint Mary's College of California - Graduate Business Programs

Date Written: December 15, 2010

Abstract

This study examines whether firm governance practices have an effect on accounting earnings quality in Bangladesh. Using a sample of 648 firm-year observations for the period of 2001 - 2006, the result suggests that corporate governance mechanisms provide greater monitoring of financial reporting and these mechanisms positively affect firm earnings quality. This knowledge could be used by the capital market regulator, the Securities and Exchange Commission (SEC), to design mechanisms to constrain managers’ earnings management practices. This, in turn, would contribute towards development of an efficient stock market and thus protect investors’ interests.

Keywords: earnings quality, discretionary accruals, corporate governance

JEL Classification: J3, K2, M4

Suggested Citation

Houqe, Muhammad Nurul and van Zijl, Tony and Dunstan, Keitha L. and Karim, A.K.M. Waresul, Does Corporate Governance affect Earnings Quality: Preliminary Evidence from an Emerging Market (December 15, 2010). A T Business Review, 7(3), 48-57, 2011. Available at SSRN: https://ssrn.com/abstract=1726134

Muhammad Nurul Houqe (Contact Author)

School of Accountancy ( email )

New Zealand

Tony Van Zijl

Victoria University of Wellington - Faculty of Commerce and Administration ( email )

RH 606, Pipitea Campus, 6th Floor, Rutherford Hous
23 Lambton Quay
Wellington
Australia

Keitha L. Dunstan

Bond University - School of Business ( email )

Gold Coast, QLD 4229
Australia

A.K.M. Waresul Karim

Saint Mary's College of California - Graduate Business Programs ( email )

United States

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