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Do corporate governance recommendations improve the performance and accountability of small listed companies?

Do corporate governance recommendations improve the performance and accountability of small... This study examines whether the implementation of the 2003 Australian Securities Exchange Limited governance recommendations influenced the governance choices of small companies and whether compliance improves their accounting and market performance and earnings quality. Our analysis examines small and large companies because we are interested in the different effects of the governance recommendations on the two groups. The analysis shows a significant shift by small and large companies to comply with the recommendations around the time of their introduction. We find that formation of an audit committee surrounding the reform period is significantly associated with improved earnings quality for small and large companies. However, compliance with other governance recommendations is not systematically associated with improved performance or earnings quality. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

Do corporate governance recommendations improve the performance and accountability of small listed companies?

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References (115)

Publisher
Wiley
Copyright
Accounting and Finance © 2013 AFAANZ
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12055
Publisher site
See Article on Publisher Site

Abstract

This study examines whether the implementation of the 2003 Australian Securities Exchange Limited governance recommendations influenced the governance choices of small companies and whether compliance improves their accounting and market performance and earnings quality. Our analysis examines small and large companies because we are interested in the different effects of the governance recommendations on the two groups. The analysis shows a significant shift by small and large companies to comply with the recommendations around the time of their introduction. We find that formation of an audit committee surrounding the reform period is significantly associated with improved earnings quality for small and large companies. However, compliance with other governance recommendations is not systematically associated with improved performance or earnings quality.

Journal

Accounting & Finance – Wiley

Published: Mar 1, 2015

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