Presence of professional accountant in the top management team and financial reporting quality

Md Mamunur Rashid

Journal of Accounting & Organizational Change, 2020, vol. 16, issue 2, 237-257

Abstract: Purpose - The purpose of this study is to examine the effect of the presence of professional accountants in the top management team (TMT) on financial reporting quality (FRQ) in public limited companies using the context of Bangladesh, which is an emerging economy. Design/methodology/approach - This study adopts a modified version of Beestet al.’s (2009) FRQ index to measure the quality of information published in 351 annual reports of listed companies in Bangladesh. It also uses a qualitative characteristics approach to measure the quality of financial reporting, as defined by the International Financial Reporting Standards framework 2018, as opposed to an accrual or value relevance approach that solely depends on the information disclosed in the financial statements. Findings - This study finds that the presence of professional accountants in the TMT is positively and significantly associated with FRQ. The findings also show that the sample companies disclosed better quality information in the enhancing qualitative characteristics category, as compared to the fundamental qualitative characteristics category. Originality/value - This study uses the context of Bangladesh to explore a new type of relationship between the presence of professional accountants in the TMT and FRQ.

Keywords: Bangladesh; Emerging economy; Top management team; Financial reporting quality; Professional accountants; Qualitative characteristics (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-12-2018-0135

DOI: 10.1108/JAOC-12-2018-0135

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