Good Governance and Accounting Conservatism: Evidence Thai listed Companies

Abstract

Abstract— This research has attempted to examine the impact of board director characteristics, ownership structure and information communication technology on accounting conservatism (Con-ACC). The major distinction of this study from prior studies is to investigate the relationship between ICT and accounting policy across industries in Thailand. The dependent variable was firms’ accounting conservatism. In the study, explanatory variables included two major groups: corporate governance (CG), in terms of characteristics of board directors and ownership structure; and information communication technology (ICT). For CG consisted of board size, board independent, board meeting and duality directors; while, ownership structure included the highest percentage of share held. For ICT variables, the study employed the percentage of internet used by business sectors.  Furthermore, researchers employed firms’ size and firm’ leverage as control variables. The research scope focused on listed companies in the Stock exchange of Thailand (SET) for seven sectors, consisting of Agro and Food Industry Group, Resources Group, Technology Group, Service Group, Industrials Group, Consumer Products Group, Property and Construction Group, except Finance group. Collected data were from annual financial statements of each company during 2016 – 2018. Finally, 702 listed companies were included in the study.  Statistical tools for analysis were Pearson correlation and multiple regression models. The major findings found that the aggregate model provided Adjusted R-square 5.34%; in addition, both CG variables and ICT variables provided a statistically significant relation to CON-ACC at 1% significance level.  Focusing on industry level, the results revealed that CG and ICT significantly influenced Con-ACC only two industries: Industry group and Property & Construction Group. For industry sector, CG including board leadership and board meeting provided a statistically significant positive relation to CON-ACC at 1% significance level.  The ownership structure as the highest percentage of stockholder also provided a statistically significant relation to CON-ACC at 1% significance level.  Interestingly, computer usage and internet usage had a positive relation with 1% significant statistical level. Concerning Property & Construction Group, CG as duality directors provided a statistically significant positive relation to CON-ACC at 1% significance level. The ownership structure as the highest percentage of stockholder provided a statistically significant relation to CON-ACC at 5% level. Similarly, computer usage and internet usage had a positive relation with 1% significant statistics level.

Keywords: Corporate governance, information communication technology, internet usage,   accounting conservatism