Abstract
This article studies the impact of the Board of Directors (BOD) on financial reporting quality (FRQ) in Vietnam listed companies. The research uses FEM, REM and GLS regression models, data collected at energy enterprises listed on the stock market in Vietnam from 2010 - 2018, with 2162 observations. The research results have found that the BOD size, BOD independence, BOD chairperson cum CEO has a positive impact on FRQ while BOD meeting frequency has a negative impact on FRQ. In addition, the audit quality, the ratio of liabilities has a positive impact on FRQ while company size has a negative impact on FRQ. Further, the percentage of female BOD members does not have an impact on FRQ. Empirical research results serve as a useful basis for enterprises to improve FRQ by considering of factors of the board of director in a more effective manner.
Highlights
Financial statements are one of the information channels that listed companies are required to provide on the stock market
The findings show that the factors of Financial leverage, directorate independence, ownership proportion by the organization, size, independence, number of meetings have a positive impact, only ownership proportion by managers has a negative impact on financial reporting quality (FRQ)
By using a sample including 2162 observations at enterprise listed on Vietnam's stock market from 2010 -2018 to test the impact of the Board of Directors (BOD) on FRQ, the research shows that BOD size, independence and chairperson duality have a positive impact on the enterprise’s FRQ
Summary
Financial statements are one of the information channels that listed companies are required to provide on the stock market. In the stock market, listed companies are the information providers, investors are the main object to receive and use such information in their decision-making process. In addition to financial information aiming to be useful for the decision-making process of financial information users. For those outside enterprises (most of them are investors analyzers), financial reporting information must provide non-financial information such as reports and analysis by managers, auditors’ statements and other reports (Van Beest, Braam, & Boelens, 2009). With heterogeneous findings, in Vietnam, a growing economy, what is the impact of BOD on FRQ? An adequate and comprehensive study of BOD characteristics influencing FRQ in Vietnam will be of great significance
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