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Citations
... The study underscores the significance of possessing comprehensive accounting expertise in deterring manipulative actions by managers and ensuring accurate and reliable financial information. The efficacy of an AC was examined in 2016 by Bamahros and Bhasin (2016), revealing that the presence of former auditors on an AC reduced the utilisation of discretionary accruals. ...
This study investigates the association between audit committees’ (ACs) financial expertise and the implementation of accretive repurchases as a strategic method for real earnings management (REM). The study also examines empirical data about the influence of powerful Chief Executive Officers (CEOs) on the linkage between AC financial expertise and REM through accretive repurchase. A comprehensive analysis was performed on the dataset from a representative sample of 391 publicly traded Malaysian companies actively participating in accretive repurchases between 2014 and 2019. The research discovered a negative association between the level of financial proficiency exhibited by the ACs and the degree to which accretive repurchases are performed. The finding also shows a negative moderating impact of CEO authority on the connection between the financial competence of the AC and accretive repurchase practices. The results emphasise the need for financial competence inside the AC to guarantee effective oversight. However, the effectiveness of this specialised expertise appears to diminish in scenarios where a CEO possesses significant decision-making power. This indicates that AC members with financial experience are compromised in the presence of a powerful CEO. The findings carry significant ramifications, specifically for major stakeholders and governing entities in emerging economies. The significance of implementing strong corporate governance practices is emphasised to mitigate the adverse effects of dominant CEOs on monitoring functions of the ACs.s
... (Braswell & Daniels, 2017) The expert must also have an understanding of the internal control mechanisms and an understanding of how the Audit Committee functions. (Bamahros & Bhasin, 2016) Audit Committee's financial expertise specifically that of auditing increases the likelihood that detected material misstatements will be ...
This paper examines the relationship between Audit Committee effectiveness and loss provisioning management in Indian banks. The motivation behind the paper is the existence of a dichotomous scenario that exists between a strengthening Audit Committee mechanism and increasing number of financial frauds in Indian banks. It is well established that Audit Committees are at the forefront of implementing and improving the corporate governance practices and thus advance the shareholder protection. Acknowledging this importance, regulating agencies in India have introduced several reforms in the last few years. These reforms were mainly aimed at improving the Audit function, empowering the Audit Committee and promoting greater disclosures. During the same period, albeit as a separate development, the Indian Banks got exposed to several financial frauds leading to accusations of severe misdoings. Since Audit Committees are responsible for quality of auditing and disclosures within a company including fraud detection, an examination of the audit committee effectiveness and its effect on loss provisioning is necessitated. The study uses data from 40 banking companies listed with the National Stock Exchange over a period of 9 years from financial year 2012-13 to 2020-21. Audit Committee effectiveness is examined by evaluating structural characteristics (size of the committee, number of independent directors, number of promoter representatives, shareholding of committee members, financial expertize) and operational characteristics (frequency of meetings, time duration between meetings, attendance at meetings). Loss provisioning is measured in terms of net Non-performing Assets which require provisioning in the books of accounts. Results indicate that characteristics like Board independence, financial expertize and size of the Audit Committee have a negative relation with loss provisioning. Other characteristics like frequency of meetings and attendance levels do not have any effect on the earnings management. Results also reveal that amount of loss provisioning also depends upon the size of a bank and its nature of ownership.
... Similarly, the audit committee expertise duty is to evaluate the financial reports of the company and to confirm that the reports reflect the true and fair economic position of the company (Klein, 2002). Audit committee expertise is seen as a possible mechanism the government and regulatory agencies can employ to increase transparency and the quality of the financial statement (Bamahros & Bhasin, 2016). ...
... Similar to this, the audit committee must assess the company's financial reports and ensure that they accurately depict the company's economic performance (Klein, 2002). Additionally, regulatory and governmental organizations present the audit committee as a potential instrument that could improve the integrity and caliber of financial accounts (Bamahros & Bhasin, 2016). ...
Significant corporate shareholders can exert undue pressure on managers to enhance earnings in order to increase corporate value, and that as a result of this undue pressure, managers to resort to earnings management practice in the corporations they manage. This study examined the moderating role of audit committee expertise on the relationship between ownership concentration and real-earnings management in Nigeria. The independent variable (ownership concentration) was measured as shareholders who have more than 5% equity stake in a company, and real-earnings management was measured using the Roychowdhury approach. Audit committee financial expertise which is the moderator, was measured in binary form, 1 if at least one member of the committee has accounting experience, and 0 otherwise. This paper used a sample of 34 manufacturing companies listed on the Nigerian Exchange (NGX) over a period of 15 years from 2007 to 2021. Data was collected from the annual financial reports of the sampled companies. Descriptive statistics, Pearson correlation and Quantile regression was employed for data analysis and the findings show OWNCON has a positive and insignificant effect on REM. However, when audit committee financial expertise was used as a moderator, the effect of ownership concentration on the real- earnings management of listed manufacturing companies in Nigeria became statistically significant. Based on the findings, the study recommends that manufacturing companies should have more concentrated owners because the higher the concentration the less tendency of REM of listed manufacturing companies in Nigeria.
... Similar to this, the audit committee must assess the company's financial reports and ensure that they accurately depict the company's economic performance (Klein, 2002). Additionally, regulatory and governmental organizations present the audit committee as a potential instrument that could improve the integrity and caliber of financial accounts (Bamahros & Bhasin, 2016). ...
Earnings management research has a long and rich history. However, the effect of managerial ownership and audit committee financial expertise on earnings management is rarely conducted in the developing countries like Nigeria. Therefore, this study examines how managerial ownership and audit committee financial expertise on earnings management of listed manufacturing companies in Nigeria. This study used the Roychowdhury approach to measure real earnings management. Thirty-four (34) manufacturing companies out of seventy-three (73) population that were listed on the Nigerian Exchange (NGX) from 2007 to 2021 was selected as sample size. Data was gleaned from the annual financial reports of the sampled companies for this study. Descriptive statistics, Pearson correlation, and quantile regression analysis are the econometric techniques used to test the analysed data and for hypothesis testing. Results from the study showed that managerial ownership significantly affects real-earnings management. When the effect was moderated by the financial expertise of the audit committee, the effect of ownership structure on real earnings management disappears. The result from the study show that managers of manufacturing firms in Nigeria should be encouraged to own more shares in the companies they manage in order to minimize real earnings management. The evidence can theoretically serve as a solid foundation for regulatory action, notably through improving the alignment of managers' and shareholders' interests. The results from this study have important implications for regulators, who will gain from understanding how managerial ownership affects real earnings management and improve the accuracy of financial reporting. The findings will also help policymakers and academics to understand how managerial ownership affects real earnings management in Nigeria.
... Raghunandan and Rama (2007) posit that AC that meets frequently will be more supportive of the activities of internal auditors because of their concerned about financial reporting process and the internal control. Bamahros and Bhasin (2016) noted that frequent meetings of AC will enable the committee to manage the process of financial report and hence, demand a higher IAF investment. Also, Jerubet et al. (2017) posits that the IAF is considered as an essential source of information to the AC when performing their monitoring responsibilities. ...
... Similarly, the audit committee's responsibility is to assess the company's financial reports and confirm that they appropriately reflect the business 's financial and actual economic performance (Klein, 2002). Furthermore, the audit committee is promoted as government and regulatory authorities as a legitimate instrument for improving financial statement transparency and quality (Bamahros and Bhasin, 2016). ...
Portfolio management is the process of deploying funds in returns earning avenues. Portfolio selection is a process of construction of portfolios by selecting assets from the stock market with the aim of highest returns on least risk simultaneously. This paper presents the insight on portfolio selection history issues and challenges which are faced by investors while making investment decisions. The mathematical computation of return and risk is presented for understanding the problem well. Further, various constraints associated with the portfolio selection problem has been listed and also has been explained in detail such as measurement of risk; construct efficient and diversified portfolios, determining the relationship of security returns with the market, systematic risk, and market timing, etc. It also discusses prospects that will be available in the future to investors.
... The audit committee is regarded as the distinguishing characteristics of the directors in monitoring the managers' decisions concerning financial disclosure through the internal and external auditors (Firoozi et al., 2016). Hence, it has been contended that government authorities, regulatory agencies, and international professional bodies view the audit committee as likely powerful devices that can boost the reliability and transparency of financial reports (Bamahros & Bhasin, 2016). In Malaysia, the Bursa Malaysia (2019) and MCCG (2017) has mandated the establishment of audit committee in all listed companies. ...
The purpose of this study is to examine the effectiveness of audit committee characteristics on investment in internal audit function. This study developed an index by combining the individual characteristics of audit committee into one variable to capture audit committee effectiveness. Data relating to audit committee and internal audit were extracted from the annual reports of the top 100 listed companies in Malaysia. The findings of this study shows that audit committee index is negative and significantly associated with investment in internal audit function. This result implies that there will be lower investment in internal audit when the audit committee are effective. The study also found a negative relationship between audit committee independent and investment in internal audit while no relationship was established between audit committee expertise and investment in internal audit function. The findings presented in this study offer invaluable implication for regulators on important factors that should be taken seriously before investing in internal audit.
... Several audit committee attributes were used by previous literatures and were found to be effective in mitigating unwanted earnings management by firm managers. Thus, studies such as; Al-sraheen, Saleh & Alsmadi (2019), Bala et al., (2020), Habib (2016), Mohammed & Hamdan (2020) and Mohammed & Bhasin (2016) show that audit committee legal expertise, audit committee, financial accounting expertise, audit committee gender, audit committee dual chair and audit committee share ownership were critical in controlling the managers likelihood to costume their accounting earnings. In addition to that, audit committee size, audit committee independence, audit committee meetings and audit committee tenure are capable in using their experience in firm operational system to deter earning management that may have deterrence effect on the firm financial report. ...
The inability of the managers of some listed companies to produce quality financial reports for end users has remained a habit. It is of interest to note that for over four decades now regulatory agencies are still battling to solve this problem. The study therefore, examined the effect of governance control, auditor type on financial reporting quality of manufacturing firms listed in Nigeria. Census sampling and multiple regression technique was employed as technique of data analysis. The findings of the study indicated that audit committee financial expertise and joint audit improve financial reporting quality. In addition, auditor type has a significant moderating role between governance control and financial reporting quality in
manufacturing firms listed in Nigeria. It is generally recommended that shareholders in manufacturing firms listed in Nigeria should consider appointing national auditors in favor of the Big 4. This is because of the prominent role they played in mitigating unwanted discretionary accruals and interacted very well with governance control to improve financial reporting quality of manufacturing firms listed in Nigeria.
... Similarly, the audit committee duty is to evaluate the financial reports of the firm and to confirm it reflect the true and actual economic performance of the firm (Klein, 2002). Furthermore, government and regulatory agencies portray the audit committee as a possible mechanism that can increase the transparency and the quality of the financial statement (Bamahros and Bhasin, 2016). ...
This study extends existing research on managers manipulative behaviour of the accounting earnings through real earnings management by examining the impacts of audit committee attributes in Nigeria. Quantitative analyses were implemented involving a sample of 72 non-financial firms with 360 firm-year observations for a five-year period (2014-2018). Data was obtained from the annual reports of these companies as well as from Thompson Reuters and Bloomberg databases. The Panel Corrected Standard Error was used to test the model studied. The finding shows that audit committee size prevents managers' activities in earnings manipulations. Also, the result establishes that the audit committee independence presence on the audit committee control managers' opportunistic behaviour while audit committee financial expertise was monitors in curtailing earnings manipulation practice. The findings shall give insight to financial analysts, investors, and regulators on the importance of AC in enhancing the quality of the financial report, also show the role of the audit committee characteristics to deter real earnings manipulations.
... The great operation risk management failures that can be remembered are Enron and Lehman Brothers Bank. The collapse of these institution affected investors, shareholders, professionals, and academicians in their understanding and practices of operational risk management (Bamahros & Bhasin, 2016). ...
Today, business in our world is experiencing systemic failures that affect the performance of the company. Mostly, through the use of financial measurements, corporate success is viewed at their level of effectiveness. This study explored the mediating effect of the management control system and operational risk management on the impact of human capital on organizational performance. This was a quantitative research with a correlational research design. The study employed self-constructed research instruments with Cronbach Alpha of human capital 0.893, Organizational performance 0.855, and operational risk management 0.833 and management control system 0.894. The respondents were made up of 439 (10%) of the Institute of Chartered Accountant Ghana members who were conveniently sampled and answered an online distributed questionnaire. The results of the study revealed that management control system and operational risk management partially mediate the relationship between human capital and organizational performance. The research recommends that the intervention role of the management control system and operational risk management has shown to impact positively on organizational performance and human capital. Therefore, the implementation of a management control system and operational risk management must be paramount to the achievement of organizational performance from the viewpoint of chartered accountants in Ghana.