The impact of corporate governance on earnings quality: evidence from Peru

Mauricio Melgarejo

Journal of Accounting in Emerging Economies, 2019, vol. 9, issue 4, 527-541

Abstract: Purpose - The purpose of this paper is to explore whether firms with good corporate governance practices in countries with high levels of political and economic uncertainty, such as Peru, present a higher quality of accounting information. Design/methodology/approach - This study uses a multivariate regression analysis to investigate the impact of good corporate governance practices on the quality of accounting information for the firms listed in the Lima Stock Exchange (LSE). Findings - Firms included in the Good Corporate Governance Index, in the LSE, present more value relevant, more persistent and more conservative accounting reports. These results hold after controlling for a self-selection bias. Originality/value - It is the first paper to explore the impact of good corporate practices on earnings quality in Peru. Also, this study uses a two-state regression methodology to control for the self-selection bias in the sample.

Keywords: Corporate governance; Latin America; Accounting conservatism; Earnings response coefficient; Earnings persistance (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaeepp:jaee-12-2018-0138

DOI: 10.1108/JAEE-12-2018-0138

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