Contemporary Issues in Accounting Article 2022

Running Head: CONTEMPORARY ISSUES IN ACCOUNTING
CONTEMPORARY ISSUES IN ACCOUNTING
Name of the Student
Name of the University
Author Note

COMTEMPORARY ISSUES IN ACCOUNTING1
Subject: Habbash, M., 2019. The role of corporate governance regulations in constraining
earnings management practice in Saudi Arabia. In Research in Corporate and Shari’ah
Governance in the Muslim World: Theory and Practice (pp. 127-140).
Post Author:
Posted Date:
Edited Date:
The chosen article by Murya Habbas has given his views on corporate governance role in
constraining the earnings management practices in the Saudi Arabia. This article is based on
the Topic 5 of the corporate governance. The author has demonstrated in his article that how
corporate governance helps in assisting the convergence of the interests between the
managers as well as shareholders for the enhancement of the financial reporting quality. The
theory of stakeholders helps the business organization for creating the value as much possible
for the stakeholders. This theory of stakeholder focusses on effect of the activities of the
corporate on all the identifiable corporation stakeholders. In the recent decades, especially
after several collapses of the large firms, the regulators of the stock market as well as the
agencies of the protection of investor have always been very much concerned about the
earnings management. In the article, author has stated that there exists negative as well
significant relationship, which is in between the independence of board as well as indicator of
the earnings management. The larger the board of the company, the more effective would be
monitoring of the financial reporting. The author has also stated that in case, if the sizes of
the board are larger, then meetings of board will not be suitable communication means
between the directors. Therefore, the theory of stakeholders applies to the article, as this
article gives the understanding that the firm, which is having mechanism of effective
corporate governance, undertakes less management of accruals. The analysis suggests that