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The impact of corporate governance on earnings quality: evidence from Peru

The impact of corporate governance on earnings quality: evidence from Peru The purpose of this paper is to explore whether firms with good corporate governance practices in countries with high levels of political and economic uncertainty, such as Peru, present a higher quality of accounting information.Design/methodology/approachThis study uses a multivariate regression analysis to investigate the impact of good corporate governance practices on the quality of accounting information for the firms listed in the Lima Stock Exchange (LSE).FindingsFirms included in the Good Corporate Governance Index, in the LSE, present more value relevant, more persistent and more conservative accounting reports. These results hold after controlling for a self-selection bias.Originality/valueIt is the first paper to explore the impact of good corporate practices on earnings quality in Peru. Also, this study uses a two-state regression methodology to control for the self-selection bias in the sample. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting in Emerging Economies Emerald Publishing

The impact of corporate governance on earnings quality: evidence from Peru

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2042-1168
DOI
10.1108/jaee-12-2018-0138
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to explore whether firms with good corporate governance practices in countries with high levels of political and economic uncertainty, such as Peru, present a higher quality of accounting information.Design/methodology/approachThis study uses a multivariate regression analysis to investigate the impact of good corporate governance practices on the quality of accounting information for the firms listed in the Lima Stock Exchange (LSE).FindingsFirms included in the Good Corporate Governance Index, in the LSE, present more value relevant, more persistent and more conservative accounting reports. These results hold after controlling for a self-selection bias.Originality/valueIt is the first paper to explore the impact of good corporate practices on earnings quality in Peru. Also, this study uses a two-state regression methodology to control for the self-selection bias in the sample.

Journal

Journal of Accounting in Emerging EconomiesEmerald Publishing

Published: Oct 15, 2019

Keywords: Corporate governance; Latin America; Accounting conservatism; Earnings response coefficient; Earnings persistance

References