Ownership structure and financial reporting quality: Influence of audit quality evidence from Jordan
The issues of ownership structure, audit quality, earnings management and financial reporting quality have received more consideration from public, profession and other interested parties particularly after persistent firms' scandals. Ownership structure play essential role in improve finan...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | en |
| Published: |
2019
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| Subjects: | |
| Online Access: | http://eprints.unisza.edu.my/6521/1/FH02-FPP-19-31437.pdf http://eprints.unisza.edu.my/6521/ |
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| Summary: | The issues of ownership structure, audit quality,
earnings management and financial reporting quality have
received more consideration from public, profession and other
interested parties particularly after persistent firms' scandals.
Ownership structure play essential role in improve financial
reporting quality (FRQ) through acting as effective internal
control. This study examines the influence of the various types of
ownership on the FRQ and the influence of audit quality. A
stream of literature has examined the relationships between the
different types of ownership, audit quality and FRQ. This study
aims to connect such of these variables to produce an integrated
model describing the influence of ownership structure with in the
company and audit quality on FRQ. Therefore, the following
relationships are tested: Ownership structure and FRQ,
Mediating effect of auditor quality on these relationships, and
audit quality and FRQ. Using Panel Data of 180 Jordanian
company listed in ASE from 2009-2017, results showed that
directors' and family ownership have significantly positive effect
on FRQ through reducing earnings management; Institutional
ownership has significantly negative influence on FRQ;
Managerial ownership has insignificant impact on FRQ. Audit
quality has partial mediating impact on these relationships. Audit
quality found to has significantly positive impact on FRQ, it
implies that audit quality is considered as deterrent to earnings
management. This study suggests to increase the supervisory and
monitoring role of institutional ownership on the management
when preparing financial statements. |
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