Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms
This paper examines whether ownership structure improve the financial reporting quality. We built on two different econometric techniques including Feasible Generalized Least Square (FGLS) and Panel Corrected Standard error Model (PCSE) by using a sample of 150 non-financial firms listed on Paki...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2020
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| Online Access: | http://journalarticle.ukm.my/16736/ http://journalarticle.ukm.my/16736/1/33724-141072-1-PB.pdf |
| _version_ | 1848814128152444928 |
|---|---|
| author | Shah, Syed Farhan Abdul Rashid, Malik, Wasim Shahid Shahzad, Faisal |
| author_facet | Shah, Syed Farhan Abdul Rashid, Malik, Wasim Shahid Shahzad, Faisal |
| author_sort | Shah, Syed Farhan |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | This paper examines whether ownership structure improve the financial reporting quality. We built on two different
econometric techniques including Feasible Generalized Least Square (FGLS) and Panel Corrected Standard error
Model (PCSE) by using a sample of 150 non-financial firms listed on Pakistan Stock exchange for the period of 2008-
2017. The results propose that institutional ownership and as well as managerial ownership are negatively related to
real earnings manipulation, which implies that both these types of ownership structure act as a best monitoring
mechanism in reducing real earnings manipulation and thus enhancing the financial reporting quality. Whereas, state
ownership and family ownership are positively associated to real earnings manipulation, which suggest that family
and state ownerships engage in real earnings manipulation and thus reducing the financial reporting quality. Overall
results supports the alignment hypothesis, entrenchment effect and efficient monitoring hypothesis of the agency
theory. The results of the study provide practical implication for investors and policymakers in understanding the
role of ownership on financial reporting quality. |
| first_indexed | 2025-11-15T00:29:09Z |
| format | Article |
| id | oai:generic.eprints.org:16736 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:29:09Z |
| publishDate | 2020 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:167362021-06-08T02:30:12Z http://journalarticle.ukm.my/16736/ Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms Shah, Syed Farhan Abdul Rashid, Malik, Wasim Shahid Shahzad, Faisal This paper examines whether ownership structure improve the financial reporting quality. We built on two different econometric techniques including Feasible Generalized Least Square (FGLS) and Panel Corrected Standard error Model (PCSE) by using a sample of 150 non-financial firms listed on Pakistan Stock exchange for the period of 2008- 2017. The results propose that institutional ownership and as well as managerial ownership are negatively related to real earnings manipulation, which implies that both these types of ownership structure act as a best monitoring mechanism in reducing real earnings manipulation and thus enhancing the financial reporting quality. Whereas, state ownership and family ownership are positively associated to real earnings manipulation, which suggest that family and state ownerships engage in real earnings manipulation and thus reducing the financial reporting quality. Overall results supports the alignment hypothesis, entrenchment effect and efficient monitoring hypothesis of the agency theory. The results of the study provide practical implication for investors and policymakers in understanding the role of ownership on financial reporting quality. Penerbit Universiti Kebangsaan Malaysia 2020 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/16736/1/33724-141072-1-PB.pdf Shah, Syed Farhan and Abdul Rashid, and Malik, Wasim Shahid and Shahzad, Faisal (2020) Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms. Asian Journal of Accounting and Governance, 14 . pp. 1-17. ISSN 2180-3838 https://ejournal.ukm.my/ajac/issue/view/1350 |
| spellingShingle | Shah, Syed Farhan Abdul Rashid, Malik, Wasim Shahid Shahzad, Faisal Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms |
| title | Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms |
| title_full | Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms |
| title_fullStr | Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms |
| title_full_unstemmed | Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms |
| title_short | Does ownership structure improve financial reporting quality? Evidence of real earnings manipulation among Pakistani firms |
| title_sort | does ownership structure improve financial reporting quality? evidence of real earnings manipulation among pakistani firms |
| url | http://journalarticle.ukm.my/16736/ http://journalarticle.ukm.my/16736/ http://journalarticle.ukm.my/16736/1/33724-141072-1-PB.pdf |