Title

Does adopting good corporate governance enhance accruals quality during the Global Financial Crisis?

Date of this Version

7-1-2012

Document Type

Conference Paper

Publication Details

Published version

Aldamen, H., & Duncan, K. (2012). Does adopting good corporate governance enhance accruals quality during the Global Financial Crisis? Paper presented at the 2012 AFAANZ Conference, 1-3 July. Melbourne.

Access the conference

2012 HERDC submission. FoR code: 150103

© Copyright The Authors, 2012

Abstract

This paper examines the impact of corporate governance practices on accruals quality during the global financial crisis (GFC). Prior research establishes linkages between good governance and accruals quality during periods of financial stability (Strydom 2008; Kent et al. 2010; Dhaliwal et al. 2010). We extend this analysis to the 2008-2009 GFC period to assess whether the monitoring and informational benefits of corporate governance mitigate the negative effects of the exogenous shock, thereby increasing accruals quality. Our findings show that good corporate governance practices increases accruals quality during the GFC. Furthermore, governance is shown to positively impact innate accruals quality and, to some extent, discretionary accruals quality.

 

This document has been peer reviewed.