Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence
This study examines factors influencing and constraining the decision to recognize zero goodwill impairment in a sample of 52 Singaporean listed firms from 2010–2012. Using binary logistic regressions, the results reveal that firms that are approaching violation of their debt covenants have a higher...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2017-08-01
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| Series: | Business: Theory and Practice |
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| Online Access: | https://journals.vgtu.lt/index.php/BTP/article/view/8164 |
| _version_ | 1797333188642603008 |
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| author | Jamaliah Abdul-Majid |
| author_facet | Jamaliah Abdul-Majid |
| author_sort | Jamaliah Abdul-Majid |
| collection | DOAJ |
| description | This study examines factors influencing and constraining the decision to recognize zero goodwill impairment in a sample of 52 Singaporean listed firms from 2010–2012. Using binary logistic regressions, the results reveal that firms that are approaching violation of their debt covenants have a higher likelihood of exercising the recognition choice, while a higher proportion of audit committee independence constrains this choice. The policy implication of this study is that to improve the quality of the financial statements, the relevant authorities need to monitor firms’ reporting incentives closely. This study contributes to the literature on IFRS by providing evidence that supports the applicability of the debt hypothesis in explaining the decision of Singaporean listed firms to recognize zero goodwill impairment. |
| first_indexed | 2024-03-08T08:00:09Z |
| format | Article |
| id | doaj.art-edf7544313324a95b51d7c4dbf31ad54 |
| institution | Directory Open Access Journal |
| issn | 1648-0627 1822-4202 |
| language | English |
| last_indexed | 2024-03-08T08:00:09Z |
| publishDate | 2017-08-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Business: Theory and Practice |
| spelling | doaj.art-edf7544313324a95b51d7c4dbf31ad542024-02-02T12:42:45ZengVilnius Gediminas Technical UniversityBusiness: Theory and Practice1648-06271822-42022017-08-011810.3846/btp.2017.01314800Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidenceJamaliah Abdul-Majid0Universiti Utara MalaysiaSchool of Accountancy, College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, MalaysiaThis study examines factors influencing and constraining the decision to recognize zero goodwill impairment in a sample of 52 Singaporean listed firms from 2010–2012. Using binary logistic regressions, the results reveal that firms that are approaching violation of their debt covenants have a higher likelihood of exercising the recognition choice, while a higher proportion of audit committee independence constrains this choice. The policy implication of this study is that to improve the quality of the financial statements, the relevant authorities need to monitor firms’ reporting incentives closely. This study contributes to the literature on IFRS by providing evidence that supports the applicability of the debt hypothesis in explaining the decision of Singaporean listed firms to recognize zero goodwill impairment.https://journals.vgtu.lt/index.php/BTP/article/view/8164IFRSrecognition choicecontracting perspectiveaudit committee independencemanagerial discretiongoodwill impairment |
| spellingShingle | Jamaliah Abdul-Majid Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence Business: Theory and Practice IFRS recognition choice contracting perspective audit committee independence managerial discretion goodwill impairment |
| title | Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence |
| title_full | Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence |
| title_fullStr | Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence |
| title_full_unstemmed | Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence |
| title_short | Audit committee independence and a contracting perspective on goodwill impairment: Singaporean evidence |
| title_sort | audit committee independence and a contracting perspective on goodwill impairment singaporean evidence |
| topic | IFRS recognition choice contracting perspective audit committee independence managerial discretion goodwill impairment |
| url | https://journals.vgtu.lt/index.php/BTP/article/view/8164 |
| work_keys_str_mv | AT jamaliahabdulmajid auditcommitteeindependenceandacontractingperspectiveongoodwillimpairmentsingaporeanevidence |