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Impact of corporate governance attributes and financial reporting lag on corporate financial performance

Impact of corporate governance attributes and financial reporting lag on corporate financial... The purpose of this paper is to investigate selected corporate governance attributes and financial reporting lag and their impact on financial performance of listed firms in Ghana.Design/methodology/approachThe study uses 90 firm-year data for the period 2012–2014 for firms listed on the GSE. Each annual report was individually examined and coded to obtain the financial reporting lag. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.FindingsThe descriptive statistics indicate that over the three years, the mean value of timeliness of financial reporting (ARL) is 86 days (SD 21 days), minimum is 55 days and maximum is 173 days. The regression analysis results indicate that financial reporting lag has a negative statistically significant relationship with firm performance. This negative sign indicates that when financial performances of companies are high (good news), companies have the tendency to disclose this situation early to the public.Practical implicationsFirms that are not timely in the financial reporting practices will find it difficult to attract capital as the delay will affect their reputation.Originality/valueThis study is one of the few to measure financial reporting lag and its impact on firm financial performance in Sub-Saharan Africa. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png African Journal of Economic and Management Studies Emerald Publishing

Impact of corporate governance attributes and financial reporting lag on corporate financial performance

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2040-0705
DOI
10.1108/ajems-08-2017-0205
Publisher site
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Abstract

The purpose of this paper is to investigate selected corporate governance attributes and financial reporting lag and their impact on financial performance of listed firms in Ghana.Design/methodology/approachThe study uses 90 firm-year data for the period 2012–2014 for firms listed on the GSE. Each annual report was individually examined and coded to obtain the financial reporting lag. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.FindingsThe descriptive statistics indicate that over the three years, the mean value of timeliness of financial reporting (ARL) is 86 days (SD 21 days), minimum is 55 days and maximum is 173 days. The regression analysis results indicate that financial reporting lag has a negative statistically significant relationship with firm performance. This negative sign indicates that when financial performances of companies are high (good news), companies have the tendency to disclose this situation early to the public.Practical implicationsFirms that are not timely in the financial reporting practices will find it difficult to attract capital as the delay will affect their reputation.Originality/valueThis study is one of the few to measure financial reporting lag and its impact on firm financial performance in Sub-Saharan Africa.

Journal

African Journal of Economic and Management Studies – Emerald Publishing

Published: Aug 14, 2018

Keywords: Corporate governance; Ghana; Firm performance; Board characteristics; Financial reporting lag; Ghana Stock Exchange; Timeliness of reporting

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