Browsing by Author "Houqe, Muhammad Nurul"

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Open Access
Board Ethics and Auditor Choice – International Evidence
(Te Herenga Waka—Victoria University of Wellington, 2010) Houqe, Muhammad Nurul; Dunstan, Keitha; Karim, AKM Waresul; van Zijl, Tony
This study examines whether firms' auditor choice relates reflects the strength of board ethics. Using a large sample of firms 132,853 firm year observations from forty-six countries around the globe. and controlling for a number of firm- and country-level factors, we find that firms in countries where “high board ethical values” prevail are more likely to hire a Big 4 auditor. We also find that the relation between board ethical values and auditor choice is mitigated by the firm's board size. These results establish an indirect link between board ethics and financial reporting quality through the firm's choice of auditor.
Open Access
Business strategy and earnings quality
(Te Herenga Waka—Victoria University of Wellington, 2013) Houqe, Muhammad Nurul; Kerr, Ryan; Monem, Reza
Using the Miles and Snow (1978) strategy typology, this study investigates whether business strategy is associated with the quality of reported earnings. In a sample of U.S. listed firms, we predict and find that defender-strategy firms are associated with higher levels of earnings management and prospector-strategy firms are associated with higher levels of accounting conservatism. However, this relation between business strategy and earnings quality is altered during high and low economic growth periods. In high-growth periods, while prospector firms exhibit lesser accounting conservatism, defender firms exhibit lesser earning management. In low-growth periods, the prospector firms become more conservative in reporting while the defender firms engage in more aggressive earnings management. Our findings provide direct evidence of the link between business strategy and earnings quality.
Open Access
The effect of Investor Protection and IFRS Adoption on Earnings Quality around the World
(Te Herenga Waka—Victoria University of Wellington, 2010) Houqe, Muhammad Nurul; Dunstan, Keitha; Karim, AKM Waresul; van Zijl, Tony
This study examines the effect of investor protection and IFRS on the quality of accounting earnings for forty-six countries around the globe. Two attributes of accounting earnings are studied: the magnitude of discretionary accruals, and the avoidance of loss reporting. The results suggest that IFRS adoption per se doest not lead to increased earnings quality, at least based on the earnings attributes studied in our study. Specifically, accounting earnings quality improves as investor protection regimes become stronger, but only for IFRS adopting countries, that is, the effect of investor protection is mediated through the adoption of IFRS. The results highlight the importance of accounting enforcement to financial reporting quality and the need for standard setters and policy makers to design mechanisms that will limit managers’ earnings management practices.
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Governance of Tunnelling in Developing Countries: Evidence from Bangladesh
(Te Herenga Waka—Victoria University of Wellington, 2017) Tareq, Mohammad; Houqe, Muhammad Nurul; van Zijl, Tony
Tunnelling is a governance issue between controlling shareholders and minority shareholders in both developed and developing countries. However, most studies on tunnelling are in developed countries with the few exceptions of studies on China, India and Mexico. Using Oliver Williamson’s Market and Hierarchy model this paper analyses the suitability of the governance requirements on tunnelling in Bangladesh and reports on interviews with non-independent directors, independent directors, and audit committee members. The study thus identifies the limitations and factors that affect the implementation and effectiveness of the current governance requirements to constrain tunnelling in companies in Bangladesh.
Open Access
Government Quality, the Adoption of IFRS and Auditor Choice: A Cross Country Analysis
(Te Herenga Waka—Victoria University of Wellington, 2011) Houqe, Muhammad Nurul; van Zijl, Tony; Monem, Reza
We examine the association between country-level government quality and firms’ choice of external auditors. We use a firm’s choice of a Big 4 auditor as a proxy for the demand for high-quality financial reporting. Using a cross-sectional sample of 142,193 firm-year observations from 46 countries over 1998-2007, we show that government quality of a country has a significant positive effect on the likelihood of choosing Big 4 auditors by firms in that country. We also show that firms in countries with strong governments that have adopted IFRS are more likely to choose Big 4 than non-Big 4 auditors. To our knowledge, this is the first study of its kind to provide direct evidence on the role of government quality in firms’ choice of external auditors. The results provide insights for policy makers on the importance of government quality toward improving financial reporting quality in a country.
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Punishment of Bribery and Corruption: Evidence from the Malaysian Judicial System
(Te Herenga Waka—Victoria University of Wellington, 2017) Idrus, Muhammad Arif; Houqe, Muhammad Nurul; Bui, Binh; van Zijl, Tony
We investigate the judicial outcomes of crimes involving bribery and corruption in the context of the Malaysian judicial system. Using a sample of 1869 court cases over the period 2006 to 2013, we find that ‘white-collar’ workers, politically connected offenders, government employees, female offenders, indigenous Malaysians (Bumiputera) and private attorney offenders receive more lenient treatment compared to others. Evidence is also found that prior conviction of the offender and the seriousness of the offencee play significant roles in determining the fines and imprisonment of the offender. Moreover, young offenders receive harsher sentences compared to older offenders in terms of jail sentences but young offenders receive lower fines compared to older offender. We also find that more educated offenders receive more fines but fewer jail sentences. Our findings clearly suggest that not everybody is equal in the eyes of the Malaysian judicial system.