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Governance Structure, Ownership Structure and Earnings Predictability: Malaysian Evidence

  • 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)

Registered author(s):

    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.

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    File URL: http://web.usm.my/journal/aamjaf/vol%209-1-2013/Art%201%20%281-23%29.pdf
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    Article provided by Penerbit Universiti Sains Malaysia in its journal Asian Academy of Management Journal of Accounting and Finance.

    Volume (Year): 9 (2013)
    Issue (Month): 1 ()
    Pages: 1-23

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    Handle: RePEc:usm:journl:aamjaf00901_1-23
    Contact details of provider: Web page: http://web.usm.my/aamj/

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    1. Jui-Chin Chang & Huey-Lian Sun, 2010. "Does the disclosure of corporate governance structures affect firms' earnings quality?," Review of Accounting and Finance, Emerald Group Publishing, vol. 9(3), pages 212-243, August.
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