Figure 1 - uploaded by Mohammed Aminu Bello
Content may be subject to copyright.
Corporate Governance, Audit Committee Based Model
Source publication
The effect of corporate governance on the organization's financial performance has been a crucial issue since the last global financial distress. Many accounting scandals and numerous cases of corporate governance malpractice brought about more attention to corporate governance. The issue is a serious factor in economic growth and financial market...
Citations
... The audit committee (AC) is a delegate body of the board of directors that monitors the company's financial reporting process and reduces information asymmetry between insiders (managers) and shareholders (Al-ahdal et al., 2020;Mustapha et al., 2020;Badawy, 2020;Almaqtari et al., 2021;Sani, 2022). According to studies, the AC should have numerous qualities (e.g., the optimal size for its members, independence, diligence, and professionalism) to improve enterprises' financial performance and market value (Alahdal et al., 2020;Badawy, 2020;Almaqtari et al., 2021;Sani, 2022) . ...
... The audit committee's oversight of financial reporting and executive operations affects the board's performance (Bataineh & Soumadi, 2020;Sani, 2022). An independent audit committee can oversee executive conduct on the board's behalf (Alahdal et al., 2020;Mustapha et al., 2020;Badawy, 2020;Almaqtari et al., 2021). The audit committee's independence improves the board's supervision, which boosts firm performance and shareholder wealth (Alahdal et al., 2020;Almaqtari et al., 2021). ...
... Since it can properly analyse financial data and oversee management, the audit committee's independence helps the company's financial performance . Audit committees also meet with external and internal auditors to evaluate financial reports and apply policies to executive behaviour (Rao, 2018;Al Farooque et al., 2019;Al-ahdal et al., 2020;Mustapha et al., 2020). Thus, more audit committee meetings improve business performance (Al Farooque et al., 2019;Bataineh & Soumadi, 2020;Sani, 2022). ...
Corporate governance (CG) is critical in developing a corporate culture of awareness, transparency, and openness. Despite this, previous studies have not yet reached an agreement on the most important dimensions of CG implementation and their correlation with the financial performance of financial and non-financial companies, and there is a scarcity of studies that examined variables such as organisational culture (OC) that could improve CG implementation and their relationship with firm financial performance, particularly in developing countries. This paper provides a brief overview of the dimensions of CG implementation, which are board properties, audit committee characteristics, and transparency and disclosure as the most important dimensions of CG implementation, and their impact on financial performance in developing-country manufacturing firms. Furthermore, the purpose of this study is to look into the role of OC as a moderating variable in the relationship between the implementation of CG dimensions (board properties, audit committee characteristics, and transparency and disclosure) and the financial performance of manufacturing firms in developing countries. A conceptual model was developed for this study based on previous literature, revealing that there is a theoretical correlation between board properties, audit committee characteristics, and transparency and disclosure as main dimensions of CG implementation and financial performance in developing countries' manufacturing firms, most notably, this study also theoretically demonstrated the role of OC as a primary determinant in affecting the association between CG dimension implementation and financial success in manufacturing enterprises in developing countries. However, to explore correlations in the suggested model, these theoretical conclusions require a survey of a sample of executive directors in manufacturing enterprises in a developing country such as Saudi Arabia. Based on the theoretical findings of this study, this study contributes to raising awareness among manufacturing business managers in developing countries about the importance of CG dimensions and OC in enhancing their companies' financial performance. Furthermore, the current study is regarded as a foundation for future research and studies, particularly in the context of CG, OC, and financial performance in manufacturing enterprises in developing nations.
Keywords: Corporate Governance, Organizational Culture, Financial Performance, Board of Directors' Characteristics, Audit Committee, Transparency and Disclosure
This analysis examines the bank's financial CSR disclosure practices in Brunei Darussalam, Indonesia, Malaysia, and the Philippines (abbreviated as BIMP-EAGA). This research aimed to evaluate CSR reports against the 91 criteria established by the G4 of the Global Reporting Initiatives. The return on assets (ROA) indicates a bank's profitability. The ubiquity of audit committees inside the financial institution demonstrates the committee's role as a moderating factor. Thirty-four financial institutions that were chosen to be typical of banks in BIMP-EAGA countries were evaluated for this research. The bank's annual and sustainability reports provided the secondary data used in the investigation. The research results also show that CSR disclosure significantly impacts a bank's bottom line. CSR disclosure may positively affect a bank's bottom line if the audit committee monitors it. The relationship between corporate social responsibility (CSR) disclosure and economic success in BIMP-EAGA countries may be clarified by the findings of this study. This research aims to illuminate the audit committee's possible function in establishing a causal link between CSR disclosure and the bank's bottom lines.
