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Pattanayak, J. K.
- Impact of Corporate Governance on Level of Earnings Management and Overall Firm Performance: A Review
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Authors
Affiliations
1 Department of Management Studies, Indian School of Mines, Dhanbad, IN
1 Department of Management Studies, Indian School of Mines, Dhanbad, IN
Source
International Journal of Financial Management, Vol 4, No 1 (2014), Pagination: 82-89Abstract
Large number of corporate scams in recent years has resulted in increased attention to the importance of corporate governance, earnings management mechanism, and firm performance. The sudden collapses of large business houses, mostly resulting out of bad governance, have negatively affected the securities markets globally. Considering the significance attached to corporate governance as a monitoring tool for firm performance, several empirical studies are undertaken by researchers in the context of corporate houses belonging to different developed countries. A review of the previous research shows that corporate governance practices influence earnings manipulation practices and also the overall firm performance. The earnings management practices through accruals management (basically equipped with the accounting engineering of discretionary accruals) have been emerging as one of the most concerned areas of research in the present time. The present study is an attempt to review the existing literature available on different conceptual models of corporate governance and establishing the fact that good governance leads to controlled earnings management practices and better firm performance. Majority of the literature has been focusing on the relationship among shareholders, stakeholders, directors, and management. Findings of these studies are mixed, and as a result it is often difficult for user to draw any firm conclusion on the relationship. Most of the research findings show that board composition significantly determines earnings management practices. However, no structured framework establishing such relationship is confirmed by the existing literature.Keywords
Corporate Governance, Earnings Management, Discretionary Accruals, Firm Performance
- A Study on Cross-Sectional Dependence and Independence Approach in an Event Study - A Case with Sensex
Abstract Views :338 |
PDF Views:2
Authors
Affiliations
1 Agriculture Insurance Company of India, Chowringhee Road, Kolkata, West Bengal, IN
2 Department of Management Studies, ISM, Dhanbad, Jharkhand, IN
1 Agriculture Insurance Company of India, Chowringhee Road, Kolkata, West Bengal, IN
2 Department of Management Studies, ISM, Dhanbad, Jharkhand, IN
Source
International Journal of Financial Management, Vol 4, No 3 (2014), Pagination: 11-27Abstract
Purpose: The objective of the study is to make a comparative analysis of the result of an event study on the effect of quarterly earnings announcement on stock returns of firms constituting SENSEX. The comparative study is pursued by incorporating cross sectional dependence adjustment as well cross sectional independence adjustment, side-by-side, in the estimation of standard deviation of Average Abnormal Return (AAR).
Methodology: Event study methodology using daily returns and market model has been used for the present study. The variance of AAR has been computed under cross sectional dependence as well cross-sectional independence approaches.
Findings: The study reveals that the result of an event study analysis under cross sectional dependence adjustment and cross sectional independence adjustment, has largely been similar.
Research limitations: The present study involves study of the firms listed in BSE SENSEX. The effect of the quarterly earnings announcement with reference to firms listed in other indices, if covered, may provide different sets of results.
Value: The paper identifies the significance of cross sectional dependence adjustment as well as cross-sectional independence adjustment in the event study analysis of quarterly earnings announcement.
Keywords
Event Study, Bse-Sensex, Quarterly Earnings Announcements, Cross Sectional Dependence Approach and Cross Sectional Independence Approach.References
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- Retrieved from www.bse.com