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Governance Structure, Ownership Structure and Earnings Predictability: Malaysian Evidence

Author

Listed:
  • Redhwan Ahmed al-Dhamari

    (College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah)

  • Ku Nor Izah Ku Ismail

    (College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah)

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 chair person, 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.

Suggested Citation

  • Redhwan Ahmed al-Dhamari & Ku Nor Izah Ku Ismail, 2013. "Governance Structure, Ownership Structure and Earnings Predictability: Malaysian Evidence," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 9(1), pages 1-23.
    • Handle: RePEc:usm:journl:aamjaf00901_1-23
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    References listed on IDEAS

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    Cited by:

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    2. Mohd Faizal Jamaludin & Fathyah Hashim, 2017. "Corporate Governance, Institutional Characteristics, and Director Networks in Malaysia," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 13(2), pages 135-154.
    3. Sabur Mollah & Omar Farooque & Asma Mobarek & Philip Molyneux, 2019. "Bank Corporate Governance and Future Earnings Predictability," Journal of Financial Services Research, Springer;Western Finance Association, vol. 56(3), pages 369-394, December.
    4. hmed Diab & Aref M. Eissa & Samir Ibrahim Abdelazim, 2022. "Dividends Payout and Earnings Predictability: Evidence from a Developing Country," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, September.

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