Does Corporate Governance and Earning Quality Mitigate Idiosyncratic Risk? Evidence from an Emerging Economy

Article

Rahman, Habib Ur, Ali, Asif, Arian, Adam and Sands, John. 2024. "Does Corporate Governance and Earning Quality Mitigate Idiosyncratic Risk? Evidence from an Emerging Economy." Journal of Risk and Financial Management. 17 (8). https://doi.org/10.3390/jrfm17080362
Article Title

Does Corporate Governance and Earning Quality Mitigate Idiosyncratic Risk? Evidence from an Emerging Economy

ERA Journal ID213440
Article CategoryArticle
AuthorsRahman, Habib Ur, Ali, Asif, Arian, Adam and Sands, John
Journal TitleJournal of Risk and Financial Management
Journal Citation17 (8)
Article Number362
Number of Pages15
Year2024
PublisherMDPI AG
Place of PublicationSwitzerland
ISSN1911-8066
1911-8074
Digital Object Identifier (DOI)https://doi.org/10.3390/jrfm17080362
Web Address (URL)https://www.mdpi.com/1911-8074/17/8/362
AbstractThis study investigates evolving corporate governance mechanisms within the context of an emerging economy. Addressing a literature gap, this study analyses the influence of corporate governance and earnings quality on idiosyncratic risk in an emerging economy. In particular, this research explores the impact of corporate governance practices and earnings quality on idiosyncratic risk. For this purpose, this research utilises a sample of 75 non-financial firms listed on the Pakistani equity market over nine years from 2010 to 2018. Employing the generalised method of moments, the findings of our empirical analysis reveal that firms with robust governance mechanisms and higher earnings quality experience minimal idiosyncratic risk. These outcomes provide valuable insights for standard setters, regulatory authorities, policymakers, and other stakeholders, emphasising the importance of governance mechanisms and earnings management in mitigating idiosyncratic return volatility.
Keywordsaccrual quality; idiosyncratic risk; earnings quality; corporate governance; board quality index
Contains Sensitive ContentDoes not contain sensitive content
ANZSRC Field of Research 2020350701. Corporate governance
Byline AffiliationsHolmes Institute
Xidian University, China
Australian Catholic University
School of Business
Permalink -

https://research.usq.edu.au/item/z9q19/does-corporate-governance-and-earning-quality-mitigate-idiosyncratic-risk-evidence-from-an-emerging-economy

Log in to edit

Download files

Published Version
jrfm-17-00362.pdf
License: CC BY 4.0
File access level: Anyone

  • 17
    total views
  • 10
    total downloads
  • 5
    views this month
  • 2
    downloads this month

Export as

Related outputs

Corporate Social Performance Through Instrumental Stakeholder Theory: A Sector-Specific Perspective
Arian, Adam, Sands, John, Rahman, Habib Ur and Khatatbeh, Ibrahim N.. 2024. "Corporate Social Performance Through Instrumental Stakeholder Theory: A Sector-Specific Perspective." Management Decision. https://doi.org/10.1108/MD-11-2023-2108
Beyond carbon emissions: addressing broader climate risks in corporate financial disclosures
Arian, Adam and Sands, John. 2024. "Beyond carbon emissions: addressing broader climate risks in corporate financial disclosures ." Policymaker.
Our research shows higher carbon emissions increase costs for Australian businesses
Arian, Adam G. and Sands, John. 2024. "Our research shows higher carbon emissions increase costs for Australian businesses." The Conversation.
Review of Balanced Scorecard Application in Public Hospital Setting
Khalid, Salim Khaleel and Sands, John. 2024. "Review of Balanced Scorecard Application in Public Hospital Setting." Al-Shurafat, Hashem, Hamdan, Allam and Sands, John (ed.) Sustainable Horizons for Business, education, and technology: Interdisciplinary Insights. Simgapore. Springer. pp. 3-14
Sustainable Horizons for Business, education, and technology: Interdisciplinary Insights
Al-Shurafat, Hashem, Hamdan, Allam and Sands, John. Al-Shurafat, Hashem, Hamdan, Allam and Sands, John (ed.) 2024. Sustainable Horizons for Business, education, and technology: Interdisciplinary Insights . Singapore. Springer.
Gender diversity and research productivity in accounting and finance at Australian and New Zealand HEIs
Arian, Adam and Sands, John. 2024. "Gender diversity and research productivity in accounting and finance at Australian and New Zealand HEIs ." Accounting Education: An International Journal. https://doi.org/10.1080/09639284.2024.2413687
Do corporate carbon emissions affect risk and capital costs?
Arian, Adam G. and Sands, John. 2024. "Do corporate carbon emissions affect risk and capital costs?" International Review of Economics and Finance. 93 (Part A), pp. 1363-1377. https://doi.org/10.1016/j.iref.2024.04.018
Did Emotional Intelligence Traits Mitigate COVID-19 Uncertainty Effects on Financial Institutions’ Board Decision-Making Process?
Hall, Jessica, Jones, Gregory, Beattie, Claire and Sands, John. 2024. "Did Emotional Intelligence Traits Mitigate COVID-19 Uncertainty Effects on Financial Institutions’ Board Decision-Making Process?" Journal of Risk and Financial Management. 17 (3). https://doi.org/10.3390/jrfm17030106
Obstacles Facing the Development of Forensic Accounting Curricula within the Australian Universities: Exploring Perspectives of Practitioners and Educators
Al-Shurafat, Hashem, Sands, John, Jones, Gregory and Beattie, Claire. 2024. "Obstacles Facing the Development of Forensic Accounting Curricula within the Australian Universities: Exploring Perspectives of Practitioners and Educators." Australasian Accounting Business and Finance Journal. 18 (2), pp. 188-195. https://doi.org/10.14453/aabfj.v18i2.12
A course design approach that encourages reflective practice habits
Daff, Lyn, Tame, Cathy and Sands, John. 2024. "A course design approach that encourages reflective practice habits ." The International Journal of Management Education. 22 (2). https://doi.org/https://doi.org/10.1016/j.ijme.2024.100990
Corporate climate risk disclosure: assessing materiality and stakeholder expectations for sustainable value creationUnited Kingdom
Arian, Adam and Sands, John Stephen. 2024. "Corporate climate risk disclosure: assessing materiality and stakeholder expectations for sustainable value creationUnited Kingdom ." Sustainability Accounting, Management and Policy Journal. 15 (2), pp. 457-481. https://doi.org/10.1108/SAMPJ-04-2023-0236
Enhancing accounting students’ reflective practice skills
Daff, Lyn, Tame, Cathy and Sands, John. 2023. "Enhancing accounting students’ reflective practice skills." 2023 Accounting and Finance Association of Australia and New Zealand Conference (2023 AFAANZ). Gold Coast, Australia 02 2023 - 04 Jul 2024 Australia. Accounting & Finance Association of Australia and New Zealand.
Does Fiscal Consolidation Affect Non-Performing Loans? Global Evidence from Heavily Indebted Countries (HICs)
Rahman, Habib Ur, Arian, Adam and Sands, John. 2023. "Does Fiscal Consolidation Affect Non-Performing Loans? Global Evidence from Heavily Indebted Countries (HICs)." Journal of Risk and Financial Management. 16 (9). https://doi.org/10.3390/jrfm16090417
The effect of nonfinancial performance measures, absorptive capacity, and organizational learning on innovation performance
Chong, Vincent K., Mia, Lokman, Sands, John and Wang, Zhichao Alex. 2023. "The effect of nonfinancial performance measures, absorptive capacity, and organizational learning on innovation performance." Journal of Management Control. 34 (2), pp. 201-233. https://doi.org/10.1007/s00187-023-00355-0
Industry and Stakeholder Impacts on Corporate Social Responsibility (CSR) and Financial Performance: Consumer vs. Industrial Sectors
Arian, Adam, Sands, John and Tooley, Stuart. 2023. "Industry and Stakeholder Impacts on Corporate Social Responsibility (CSR) and Financial Performance: Consumer vs. Industrial Sectors." Sustainability. 15 (16). https://doi.org/10.3390/su151612254
The influence of ownership structure on the extent of CSR reporting: An emerging market study
Al Fadli, Amer, Sands, Juhn, Jones, Gregory, Beattie, Claire and Pensiero, Dom. 2022. "The influence of ownership structure on the extent of CSR reporting: An emerging market study." Business and Society Review. 127 (3), pp. 725-754. https://doi.org/10.1111/basr.12286
The Impact of Corporate ESG Performance Disclosure Across Australian Industries
Gholami, Amir, Sands, John and Shams, Syed. 2022. "The Impact of Corporate ESG Performance Disclosure Across Australian Industries." Australasian Accounting Business and Finance Journal. 16 (4), pp. 180-200. https://doi.org/10.14453/aabfj.v16i4.10
Corporates’ sustainability disclosures impact on cost of capital and idiosyncratic risk
Gholami, Amir, Sands, John and Shams, Syed. 2023. "Corporates’ sustainability disclosures impact on cost of capital and idiosyncratic risk." Meditari Accountancy Research. 31 (4), pp. 861-886. https://doi.org/10.1108/MEDAR-06-2020-0926
Environmental, Social, Governance & Financial Performance Disclosure for Large Firms: Is This Different for SME Firms?
Gholami, Amir, Murray, Peter A. and Sands, John. 2022. "Environmental, Social, Governance & Financial Performance Disclosure for Large Firms: Is This Different for SME Firms?" Sustainability. 14 (10), pp. 1-21. https://doi.org/10.3390/su14106019
Environmental, Social and Governance Disclosure and Value Generation: Is the Financial Industry Different?
Gholami, Amir, Sands, John and Rahman, Habib Ur. 2022. "Environmental, Social and Governance Disclosure and Value Generation: Is the Financial Industry Different?" Sustainability. 14 (5), pp. 1-17. https://doi.org/10.3390/su14052647
Management control systems and governance from its institutional context
Arian, Adam G. and Sands, John. 2022. "Management control systems and governance from its institutional context ." 2022 ICVG Conference: Governance in its institutional context. Melbourne, Australia 15 - 16 Dec 2022 Australia.
Barriers and Motivations to Integrating Environmental Performance in the BSC: a case study in health care
Khalid, Salim Khaleel, Beattie, Claire and Sands, John Stephen. 2022. "Barriers and Motivations to Integrating Environmental Performance in the BSC: a case study in health care." Sustainability Accounting, Management and Policy Journal. 13 (2), pp. 297-319. https://doi.org/10.1108/SAMPJ-09-2020-0325
Associations among the Five Components within COSO Internal Control-Integrated Framework as the Underpinning of Quality Corporate Governance
Rae, Kirsten, Sands, John and Subramaniam, Nava. 2017. "Associations among the Five Components within COSO Internal Control-Integrated Framework as the Underpinning of Quality Corporate Governance." Australasian Accounting Business and Finance Journal. 11 (1), pp. 28-54. https://doi.org/10.14453/aabfj.v11i1.4
Incorporating the environmental dimension into the balanced scorecard: A case study in health care
Khalid, Salim, Beattie, Claire, Sands, John and Hampson, Veronica. 2019. "Incorporating the environmental dimension into the balanced scorecard: A case study in health care." Meditari Accountancy Research. 27 (4), pp. 652-674. https://doi.org/10.1108/MEDAR-06-2018-0360
Financial and Social Well-being Performance after Privatisation of the Port of Brisbane: A Case Study
Jayasundara, Mudiyanselage Upali Ranjith, Jones, Greg and Sands, John. 2020. "Financial and Social Well-being Performance after Privatisation of the Port of Brisbane: A Case Study." Australasian Accounting Business and Finance Journal. 14 (2), pp. 72-93. https://doi.org/10.14453/aabfj.v14i2.6
Board independence and CSR reporting: pre and post analysis of JCGC 2009
Al Fadli, Amer, Sands, John, Jones, Greg, Beattie, Claire and Pensiero, Dominic. 2020. "Board independence and CSR reporting: pre and post analysis of JCGC 2009." International Journal of Law and Management. 62 (2), pp. 117-138. https://doi.org/10.1108/IJLMA-11-2018-0259
Perceptions of the usefulness of various teaching methods in forensic accounting education
Alshurafat, Hashem, Beattie, Claire, Jones, Gregory and Sands, John. 2020. "Perceptions of the usefulness of various teaching methods in forensic accounting education." Accounting Education: An International Journal. 29 (2), pp. 177-204. https://doi.org/10.1080/09639284.2020.1719425
Board Gender Diversity and CSR Reporting: Evidence from Jordan
Al Fadli, Amer, Sands, John, Jones, Greg, Beattie, Claire and Pensiero, Dom. 2019. "Board Gender Diversity and CSR Reporting: Evidence from Jordan." Australasian Accounting Business and Finance Journal. 13 (3), pp. 29-52. https://doi.org/10.14453/aabfj.v13i3.3
Forensic accounting core and interdisciplinary curricula components in Australian universities: analysis of websites
Alshurafat, Hashem, Beattie, Claire, Jones, Gregory and Sands, John. 2019. "Forensic accounting core and interdisciplinary curricula components in Australian universities: analysis of websites." Journal of Forensic and Investigative Accounting. 11 (2 (Special edition)), pp. 353-365.
Using classroom layout to help reduce students' apprehension and increase communication
Rae, Kirsten and Sands, John. 2013. "Using classroom layout to help reduce students' apprehension and increase communication." Accounting Education: An International Journal. 22 (5), pp. 489-491. https://doi.org/10.1080/09639284.2013.835534
Advancing sustainability management accounting in the Asia Pacific region
Sands, John, Lee, Ki-Hoon and Fonseka, K .B. M. 2016. "Advancing sustainability management accounting in the Asia Pacific region." Accounting Research Journal. 29 (2), pp. 134-136. https://doi.org/10.1108/ARJ-03-2016-0035
An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance
Sands, John Stephen, Rae, Kirsten Nicole and Gadenne, David. 2016. "An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance." Accounting Research Journal. 29 (2), pp. 154-178. https://doi.org/10.1108/ARJ-04-2015-0065
Multi-perspective performance reporting systems, continuous improvement systems and organisational performance
Iselin, Errol R., Sands, John and Mia, Lokman. 2011. "Multi-perspective performance reporting systems, continuous improvement systems and organisational performance." Journal of General Management. 36 (3), pp. 19-36. https://doi.org/10.1177/030630701103600302
Guest editorial
Sands, John and Lee, Ki-Hoon. 2015. "Guest editorial." Journal of Accounting and Organisational Change. 11 (3), pp. 1-2. https://doi.org/10.1108/JAOC-07-2014-0038
Associations between organisations’ motivated workforce and environmental performance
Rae, Kirsten, Sands, John and Gadenne, David Leslie. 2015. "Associations between organisations’ motivated workforce and environmental performance." Journal of Accounting and Organisational Change. 11 (3), pp. 384-405. https://doi.org/10.1108/JAOC-10-2013-0090
Environmental and sustainability management accounting (EMA) for the development of sustainability management and accountability
Sands, John and Lee, Ki-Hoon. 2015. "Environmental and sustainability management accounting (EMA) for the development of sustainability management and accountability." Issues in Social and Environmental Accounting. 9 (1), pp. 1-4.
The influence of sustainability performance management practices on organisational sustainability performance
Gadenne, David, Mia, Lokman, Sands, John, Winata, Lanita and Hooi, George. 2012. "The influence of sustainability performance management practices on organisational sustainability performance." Journal of Accounting and Organisational Change. 8 (2), pp. 210-235. https://doi.org/10.1108/18325911211230380
The importance of understanding student learning styles in accounting degree programs
Cameron, Robyn, Clark, Pat, de Zwaan, Laura, English, Diane, Lamminmaki, Dawne, O'Leary, Conor, Rae, Kirsten and Sands, John. 2015. "The importance of understanding student learning styles in accounting degree programs." Australian Accounting Review. 25 (3), pp. 218-231. https://doi.org/10.1111/auar.12065
The association between organisational commitment and corporate social responsibility-environmental performance within an integrated sustainability balanced scorecard framework
Rae, Kirsten, Sands, John S and Gadenne, David. 2015. "The association between organisational commitment and corporate social responsibility-environmental performance within an integrated sustainability balanced scorecard framework." Issues in Social and Environmental Accounting. 9 (1), pp. 32-50.
Multi-perspective performance reporting and organisational performance: the impact of information, data and redundant cue load
Iselin, Errol R., Mia, Lokman and Sands, John. 2010. "Multi-perspective performance reporting and organisational performance: the impact of information, data and redundant cue load." International Journal of Accounting, Auditing and Performance Evaluation. 6 (1), pp. 1-27. https://doi.org/10.1504/IJAAPE.2010.030477
The association between sustainability performance management goals and organisational performance
Gadenne, David, Sands, John and Mia, Lokman. 2012. "The association between sustainability performance management goals and organisational performance." e-Journal of Social and Behavioural Research in Business. 3 (2), pp. 27-42.
Creating sustainable benefits for stakeholders of organisations using the strategy mapping framework
Rae, Kirsten and Sands, John. 2013. "Creating sustainable benefits for stakeholders of organisations using the strategy mapping framework." e-Journal of Social and Behavioural Research in Business. 4 (2), pp. 14-32.
The effects of the balanced scorecard on performance: The impact of the alignment of the strategic goals and performance reporting
Iselin, Errol R., Mia, Lokman and Sands, John. 2008. "The effects of the balanced scorecard on performance: The impact of the alignment of the strategic goals and performance reporting." Journal of General Management. 33 (4), pp. 71-85. https://doi.org/10.1177/030630700803300405
Multi‐perspective strategic goal setting, performance reporting and organisational performance
Iselin, Errol R., Mia, Lokman and Sands, John. 2008. "Multi‐perspective strategic goal setting, performance reporting and organisational performance ." Journal of Applied Accounting Research. 9 (2), pp. 76-96. https://doi.org/10.1108/09675420810900766
Educators' Epistemological Beliefs of Accounting Ethics Teaching: A Cross-Cultural Study
Auyeung, Pak K., Dagwell, Ron, Ng, Chew and Sands, John. 2006. "Educators' Epistemological Beliefs of Accounting Ethics Teaching: A Cross-Cultural Study." Accounting Research Journal. 19 (2), pp. 122-138. https://doi.org/10.1108/10309610680000683
The perceived importance of international accounting topics in the Asia-Pacific rim: A comparative study
Sands, John Stephen and Pragasam, John. 1997. "The perceived importance of international accounting topics in the Asia-Pacific rim: A comparative study." The International Journal of Accounting. 32 (2), pp. 187-202. https://doi.org/10.1016/s0020-7063(97)90025-x
Factors influencing accounting students' career choice: A cross-cultural validation study
Auyeung, Pak and Sands, John. 1997. "Factors influencing accounting students' career choice: A cross-cultural validation study." International Journal of Phytoremediation. 21 (1), pp. 13-23. https://doi.org/10.1080/096392897331596
A cross cultural study of the learning style of accounting students
Auyeung, Pak and Sands, John. 1996. "A cross cultural study of the learning style of accounting students ." Accounting and Finance. 36 (2), pp. 261-274. https://doi.org/10.1111/j.1467-629X.1996.tb00310.x