SPECIAL ISSUES RELATING TO CORPORATE GOVERNANCE AND FAMILY CONTROL
Randall Morck
Stephen A. Jarislowsky Distinguished Professor of Finance at the School of Business, University of Alberta, Edmonton, Alberta, Canada T6G2R6; and a Research Associate with the National Bureau of Economic Research
Bernard Yeung
the Abraham Krasnoff Professor of Global Business, Professor of Economics, and Professor of Management at the Stern School of Business, New York University
ABSTRACT
Control of corporate assets by wealthy families in economies is common, and control pyramids concentrate governance powers in a tiny elite in many countries. This can have negative implications for corporate governance. It can also lead to adverse
macroeconomic effects when these problems extend across a sufficiently large part of the country’ corporate sector. We consider the reasons why such ownership predominates in emerging market economies and in some developed economies. We also discuss reasons why widely held free standing firms predominate in the United States. We conclude by discussing policies countries might adopt to discourage family control pyramids, but caution that control pyramids are but one feature of an institutionally deficient economy. A concerted effort to improve a country’s institutions is needed before diffuse ownership is desirable.
(SRS-062, World Bank Policy Research Working Paper 3406, September 2004)
CORPORATE GOVERNANCE AND INFORMATION RISK POST SARBANES OXLEY
M. Strydom
F. Navissi
M. Skully
M. Veeraraghavan
Department of Accounting and Finance, Monash University, Melbourne, Australia
ABSTRACT
This study investigates the relationship between corporate governance and information risk in the period post introduction of the Sarbanes Oxley Act (2002). Previous studies investigate internal control weaknesses, and discretionary accruals surrounding reforms (Doyle et al. 2007; Asbaugh-Skaife et al. 2008; Lobo & Zhou, 2006; Cohen et al. 2005) but fail to link this to a comprehensive measure of corporate governance or at information risk specifically. A weighted internal corporate governance index is developed overcoming issues with previous efforts. We find that the quality of reported earnings figures improved significantly post SOX and that better governed firms are thus likely to have less information risk. We contribute to literature by extending previous research on information risk to corporate governance and reforms. These findings provide additional insight to the importance of good corporate governance for capital markets. Investors should be aware of the quality of firm corporate governance when assessing financial statements as this provides valuable information on their quality.
JEL code: G14, G34, M38, M41
Key words: Accruals Quality, Information risk, Corporate Governance, Sarbanes Oxley Act
(SRS-061)
THE USE OF GROUNDED THEORY IN ACCOUNTING RESEARCH
N Kirk C van Staden
School of Accountancy School of Accountancy College of Business College of Business Massey University Massey University New Zealand New Zealand
ABSTRACT
In this paper, grounded theory is investigated and applied to research on electronic commerce in order to demonstrate its use and potential limitations in accounting research. Grounded theory enables relevant theoretical concepts to emerge from the data and, in this way, leads to discovery. In treating ‘all as data’, grounded theory uses a pragmatic approach, combining qualitative and quantitative data and data-gathering methods to encourage a rich understanding of the situation. This enables the generation of theory rather than the confirmation of existing theory. To illustrate this process, this paper demonstrates the emergence, with the use of grounded theory, of a definition for
electronic commerce.
Key words : Theory development Accounting research Grounded theory Electronic commerce
(SRS-060)
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