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Statistical Examination of Earnings Quality in Emerging Markets: A Critical Review of the Literature |
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PP: 749-761 |
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doi:10.18576/jsap/140617
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Author(s) |
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Doaa Ahmed Said Boreik,
Maged Mostafa Ali Albaz,
Magdy Melegy Abdelhakim Melegy,
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Abstract |
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| The research aims to discover the nexus between earnings quality and internal determinants, such as ownership
structure, board of directors’ characteristics, and firm-level attributes in the literature and within Saudi Arabia, we followed two approaches, qualitative to analyze related previous literature and quantitative to analyze data from 218 firms listed in the Saudi market from 2022 to 2024, through two statistical models to explore the impact of ownership structure and board characteristics on earnings quality. Our results reveal that financial leverage has a strong negative effect on earnings quality, supporting agency theory. In addition, there is a statistically significant positive nexus between ownership concentration and earnings quality, which aligned with both agency and stewardship theories assumptions. Moreover, board independence is the only corporate governance variable with statistical significance with earnings quality. As, board size and meeting are insignificant, suggesting that board effectiveness depends more on composition than on size. Our findings contribute to the literature by providing new theoretical and empirical evidence from the Saudi context regarding the determinants of earnings quality and gives investors, professionals, policymakers, and regulators insights into this arguable area. Additionally, direct future research to examine the determinants of earnings quality in other economies to create a reboots framework for earnings
quality. |
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