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Corporate Governance and Equity Ownership Concentration and their Impact on Earning Management in Emerging Markets: The Case of Saudi Listed Companies

Journal of Administrative and Economics Science

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Title Corporate Governance and Equity Ownership Concentration and their Impact on Earning Management in Emerging Markets: The Case of Saudi Listed Companies
 
Creator Alsalman, Ahmed Mohammed
Albassam, Waleed Mohammed
 
Description Saudi Arabia has adopted governance reforms to protect stakeholders and enhance investorconfidence in financial statements by reducing earning management practices. The legislators have alsorecently sought to encourage foreign investment by opening the financial market to foreign investors in thelargest Arab financial market. This study seeks to test the impact of the good practice of corporategovernance and the structure of ownership in reducing and mitigating the earning management in the Saudilisted companies. The study used the quantitative approach to test this relationship statistically by adoptingindex to measure the good practice of governance by listed companies. In addition, this study used number ofindependent governance variables and ownership structures. The study also adopted Balanced Panel Data asan ideal method in the study of corporate governance as behavior. The study used a sample of 80 companiesfor a period of seven years from 2004 to 2010. The study found a number of results that companies with agood practice of governance are less likely for the corporate executives to manipulate financial statements.The results also showed a positive relationship between the size of the board of directors and earningmanagement. The study did not find a statistical relationship between the size of the audit office and theopportunities for earning management by the management. Moreover, there was no relationship between thecombination of the functions of the CEO and the chairman of the board of directors on the one hand, andearning management on the other. In terms of ownership structure variables, the study found that theincrease ownership of investment institutions, government ownership and ownership of board members incorporate capital can mitigate earning management in listed companies.Key Words: Corporate Governance, Earning Management, Governance Index and Variables, EquityOwnership Concentration, Capital Market, Institutional Investment, Saudi Listed Companies.
 
Publisher Qassim University Academic Publishing and translation
 
Contributor —
 
Date 2017-09-13
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://publications.qu.edu.sa/ojs/index.php/economic/article/view/1598
 
Source Journal Of Administrative And Economics Science; Vol 10, No 1
 
Language eng
 
Relation http://publications.qu.edu.sa/ojs/index.php/economic/article/view/1598/1483
 
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