Governance Structure, Ownership Structure and Earnings Predictability: Malaysian Evidence

Al-Dhamari, R. A., & Ismail, K. N. I. K. (2013). Governance structure, ownership structure and earnings predictability: Malaysian evidence. Asian Academy of Management Journal of Accounting and Finance, 9(1), 1-23.

16 Pages Posted: 10 Apr 2017 Last revised: 12 Apr 2017

See all articles by Redhwan Al-dhamari

Redhwan Al-dhamari

Universiti Utara Malaysia

Ku Nor Izah Ku Ismail

Universiti Utara Malaysia

Date Written: April 3, 2017

Abstract

This study is distinct from prior research focusing mainly on the relationship of corporate governance mechanisms to earnings management or earnings informativeness because it examines the associations between governance structure, ownership structure, and earnings predictability. Using a sample of 330 firms for the period of 2008 through 2009, the findings reveal that the predictive ability of earnings is high when firms have small boards, an independent chairperson, and high shareholding by institutions. However, in contradiction to our expectation is the significant but negative effect of board independence on earnings predictability. The results also demonstrate that investors do not perceive independent audit committees, more active audit committees, competent audit committees, and a high shareholding of management as good indicators of earnings numbers with a high predictive value.

Keywords: Corporate Governance, Governance structure, Ownership structure, Earnings predictability

JEL Classification: M21

Suggested Citation

Al-dhamari, Redhwan and Ku Ismail, Ku Nor Izah, Governance Structure, Ownership Structure and Earnings Predictability: Malaysian Evidence (April 3, 2017). Al-Dhamari, R. A., & Ismail, K. N. I. K. (2013). Governance structure, ownership structure and earnings predictability: Malaysian evidence. Asian Academy of Management Journal of Accounting and Finance, 9(1), 1-23., Available at SSRN: https://ssrn.com/abstract=2945299

Redhwan Al-dhamari

Universiti Utara Malaysia ( email )

Sintok
COLGIS, UUM
Sintok, KY KEDAH DARUL 06010
Malaysia

Ku Nor Izah Ku Ismail (Contact Author)

Universiti Utara Malaysia ( email )

Sintok, Kedah Darul Aman 06010
Malaysia
+6049286521 (Phone)

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