Board Composition and Earnings Quality: The Empirical Evidence form Listed Firms in the Market for Alternative Investment
Article Sidebar
Main Article Content
Abstract
The purpose of this study is to examine the relationship between board composition and earnings quality of firms listed on The Market for Alternative Investment, Thailand. The 113 firms listed on The Market for Alternative Investment in 2016 data are collected. Using multiple regression analysis, this study finds that the proportion of independent directors, which is one of firms’ board compositions, is positively associated to earning quality. Furthermore, firm size and firm growth which are two of control variables in this study is positively associated to earnings quality. These results imply that board composition is associated with earnings quality of firms listed on The Market for Alternative Investment, Thailand
Article Details
The article must be considered and accepted for publication by the editorial board of the Faculty of Management Science, Lampang Rajabhat University. The articles have been reviewed by a peer (peer review) and the author must update according to the suggestion if available before publication. Articles that are not considered the editorial team will inform the results of the consideration but will not send the original to the author.
JMMS is the Faculty of Management Science journal, Lampang Rajabhat University. Jmms published both print and online editions. We allow the use of articles for academic use under the scope of copyright law.
References
Ahmed, A. & Duellman, S. (2007). Accounting Conservatism and Board of Director Characteristics: An Empirical Analysis. Journal of Accounting and Economics, 46(1), 126-141.
Ahmed, A., Hossain, M., & Adams, M. (2006). The Effect of Board Composition and Board Size on the Informativeness of Annual Accounting Earnings. Corporate Governance: An International Review, 14(5), 418-431.
Alkdai, H. & Hanefah, M. (2012). Board of Directors’ Characteristics and Value Relevance of Accounting Information in Malaysian Shariah-Compliant Companies: A Panel Data Analysis. Economics and Finance Review, 9(2), 31-44.
Anderson, K. & Yohn, T. (2002). The Effect of 10-K Restatements on Firm Value, Information Asymmetries and Investors’ Reliance on Earnings. Working Paper. Georgetown University.
Asthana, S. (2014). Abnormal Audit Delays, Earnings Quality and Firm Value in the USA. Journal of Financial Reporting and Accounting, 12(1), 21-44.
Ariff, A. M., Ibrahim, M. K., & Othman, R. (2007). Determinants of Firm Level Governance: Malaysia Evidence. The International Journal of Business in Society, 7, 562-573.
Ball, R., Kothari, S., & Robin, A. (2000). The Effect of Institutional Factors on Properties of Accounting Earnings. Journal of Accounting and Economics, 29, 1-51.
Ball, R., Robin, A., & Wu, J. (2003). Incentives versus Standards: Properties of Accounting Income in Four East Asian Countries. Journal of Accounting and Economics, 3, 235-270.
Baysinger, B. & Butler, H. (1985). Corporate Governance and the Board of Directors: Performance Effects of Changes in Board Composition. Journal of Law, Economics, and Organizations, 1, 101-124.
Beasley, M. (1996). An Empirical Analysis of the Relation between the Board of Director Composition and Financial Statement Fraud. Accounting Review, 71, 443-465.
Beekes, W., Pope, P., & Young, S. (2004). The Link between Earnings and Timeliness, Earnings Conservatism and Board Composition: Evidence from the UK. Corporate Governance: An International Review, 12(1), 14-59.
Black, B. S., Jang, H., & Kim, W. (2006). Predicting Firms’ Corporate Governance Choices: Evidence from Korea. Journal of Corporate Finance, 12, 660-691.
Byard, D., Li, Y., & Weintrop, J. (2006). Corporate Governance and the Quality of Financial Analyst’s Information. Journal of Accounting and Public Policy, 25(5), 609-625.
Byrd, J. & Hickman, K. (1992). Do Outside Directors Monitor Managers? Evidence from Tender Offer Bids. Journal of Financial Economics, 32, 195-221.
Chaharsoughi, M. T. & Rahman, R. A. (2013). Corporate Governance and Earnings Quality: The Experience of Listed Company in Iran. Journal of Modern Accounting and Auditing, 9(6), 790-797.
Davidson, R., Goodwin-Stewart, J., & Kent, P. (2005). Internal Governance Structure and Earnings Management. Accounting and Finance, 45(2), 241-267.
Diamond, D. W. (1985). Optimal Release of Information by Firms. The Journal of Finance, 40(4), 1071-1094.
Ditropoulos, P. & Asteriou, D. (2010). The Effect of Board Composition on the Informativeness and Quality of Annual Earnings: Empirical Evidence from Greece. Research in International Business and Finance, 24(2), 190-205.
Doyle, J., Ge, W., & McVay, S. (2007). Accruals Quality and Internal Control over Financial Reporting. The Accounting Review, 82, 1141-1170.
Firth, M., Fung, P., & Rui, O. (2007). Ownership Two-Tier Board Structure, and the Informativeness of Earnings: Evidence of China. Journal of Accounting and Public Policy, 26(4), 463-496.
Francis, J. & Martin, X. (2009). Acquisition Profitability and Timely Loss Recognition. Journal of Accounting and Economics, 49, 161-178.
Gaio, C. & Raposo, C. (2014). Corporate Governance and Earnings Quality: International Evidence. Journal of Accounting and Finance, 14, 52-74.
Habib, A. & Azim, I. (2008). Corporate Governance and the Value Relevance of Accounting Information: Evidence from Australia. Accounting Research Journal, 21(2), 167-194.
Iyengar, R. J., Land, J., & Zampelli, E. (2010). Does Board Governance Improve the Quality of Accounting Earnings? Accounting Research Journal, 23, 49-68.
Hermalin, B. & Weisbach, M. (1991). The Effects of Board Composition and Direct Incentives on Firm Performance. Financial Management, 20, 101-112.
Jensen, M. & Meckling, W. (1976). Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure. Journal of Financial Economics, 3, 305-360.
Kent, P., Routledge, J, & Stewart, J. (2010). Innate and Discretionary Accruals Quality and Corporate Governance. Accounting and Finance, 50, 171-195.
Klapper, L. & Love, I. (2004). Corporate Governance, Investor Protection, and Performance in Emerging Markets. Journal of Corporate Finance, 10, 703-728.
Klein, A. (2002). Audit Committee, Board of Director Characteristics, and Earnings Management. Journal of Accounting and Economics, 33, 375-400.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1998). Law and Finance. Journal of Political Economy, 106, 1113-1155.
Linck, S., Netter, M., & Yang, T. (2008). The Determinants of Board Structure. Journal of Financial Economics, 87, 308-328.
Liu, J. & Tsai, C. (2015). Board Member Characteristics and Ownership Impacts on Real Earnings Management: Evidence from Taiwan. Accounting and Financial Research, 4(4), 84-96.
Petra, S. (2007). The Effects of Corporate Governance on the Informativeness of Earnings. Economics of Governance, 8(1), 129-152.
Rosenstein, S. & Wyatt, J. (1990). Outside Directors, Board Independence and Shareholder Wealth. Journal of Financial Economics, 2, 175-191.
Sukanantasak, N. (2014). The Effect of Corporate Governance Mechanisms on Earning Informativeness through Earnings Persistence: Empirical Evidence from Thailand. Dissertation. Rajamangala University of Technology Thanyaburi.
Verrecchia, R. E. (2001). Essays on Disclosures. Journal of Accounting and Economics, 32(1-3), 97-
Yodbutr, A. (2010). The Determinants of Corporate Governance Practices: Empirical Evidence from Thailand. Doctoral Dissertation. Chulalongkorn University.
Yermack, D. (1996). Higher Market Valuation for Firms with a Small Board of Directors. Journal of Financial Economics, 40, 185-211.
Zhang, J. (2008). The Contracting Benefits from Accounting Conservatism to Lenders and Borrowers. Journal of Accounting and Economics, 45, 27-54.