The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes
Abstract
:1. Introduction
2. Literature Review and Hypotheses
3. Method and Materials
Data Collection and Sample
4. Measures
5. Data Analysis and Results
PLS-SEM Analysis
6. Post-Hoc Analysis
7. Discussion
8. Implications for Theory and Practice
9. Limitations and Future Research Course
Author Contributions
Funding
Conflicts of Interest
Appendix A
Instruments |
---|
Sustainable Financial Data Governance Structural Practices “In our organization, we have identified key IT and non-IT decision makers to have the responsibility regarding financial data ownership, value analysis and management” “In our organization, we use steering committees to oversee and assess financial data values and costs” Procedural Practices - In our organization, we have controlled practices regarding financial data management in terms of ___________________ “Setting retention policies (e.g., Time to live) of data” “Backup routines” “Establishing/monitoring access (e.g., User access) to data” “Classifying data according to value” “Monitoring costs versus value of data” Relational Practices—In our organization, we ___________________ “Educate users and non-IT managers regarding financial data storage, utilization and costs” “Develop communications regarding policy effectiveness and user” |
Political Connections “Members of our top management team have held top government, military or political posts in the past” “Members of our top management team hold active political posts” “Members of our top management team shares strong ties with members of the parliament and/or national congress” “Members of our top management team enjoy legal protection due to their ties with political entities” |
Quality of financial reporting “Environmental liability recognized for the first time are usually debited to accumulated profit” “in our financial reports provision for warranty costs are recognized (r)” “In our financial reports, impairment loss on asset are recognized (r)” “Restructuring provision are incorrectly recognized as a liability at acquisition date (r)” “in our financial reports, revenues are recognized before installation completed” |
Instruments |
---|
Creative Accounting Practices “Our organization use creative accounting practices to meet analysts’ profit expectations” “Our organization use creative accounting practices to meet directors’ earnings forecasts” “Our organization use creative accounting practices because it is repurchasing own shares” “Our organization use creative accounting practices to reflect managers and board members’ holding share options” “Our organization use creative accounting practices to reflect managers’ bonuses based on profits” “Our organization use creative accounting practices to avoid reporting a loss or slowdown in growth” “Our organization use creative accounting practices to reflect the existence of debt covenants e.g., adjustment to match economic situations” “Our organization use creative accounting practices to reflect high institutional ownership e.g., turnover and opportunistic behavior of CEO, executive directors and managers” “Our organization use creative accounting practices because firms constantly making losses are not likely to manage earnings upwards” “Our organization use creative accounting practices to reflect high growth rate” “Our organization use creative accounting practices because of absence of audit committee” “Our organization use creative accounting practices because of poor outside director representation” “Our organization use creative accounting practices because board of directors nominated by top management” |
Decision-making Effectiveness “The quality of decisions has improved with the use of financial data governance” “The speed at which we analyze decisions has increased with the use of financial data governance” “We have an increased understanding of our customers/clients/suppliers and competitors with the use of financial data governance” |
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Instruments | 1 | 2 | 3 | 4 | 5 | α | CR | AVE | R2 |
---|---|---|---|---|---|---|---|---|---|
Sustainable Financial Data Governance | 0.75 | 0.19 | 0.26 | 0.46 | 0.57 | 0.86 | 0.89 | 0.57 | |
Political Connections | 0.27 | 0.78 | 0.57 | 0.48 | 0.21 | 0.80 | 0.86 | 0.61 | |
Creative Accounting Practices | 0.25 | 0.55 | 0.74 | 0.35 | 0.09 | 0.93 | 0.94 | 0.55 | 0.35 |
Quality of financial reporting | 0.63 | 0.65 | 0.41 | 0.74 | 0.49 | 0.72 | 0.83 | 0.55 | 0.12 |
Decision-making Effectiveness | 0.68 | 0.28 | 0.15 | 0.59 | 0.91 | 0.89 | 0.93 | 0.82 | 0.24 |
Hypotheses | Decision | |
---|---|---|
Sustainable Financial Data Governance | ->Creative Accounting Practices | Rejected |
Political Connections | ->Creative Accounting Practices | Accepted |
Creative Accounting Practices | ->Quality of financial reporting | Rejected |
Quality of financial reporting | ->Decision-making Effectiveness | Accepted |
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Ababneh, T.A.M.; Aga, M. The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes. Sustainability 2019, 11, 5676. https://doi.org/10.3390/su11205676
Ababneh TAM, Aga M. The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes. Sustainability. 2019; 11(20):5676. https://doi.org/10.3390/su11205676
Chicago/Turabian StyleAbabneh, Tha’er Amjed Mahmoud, and Mehmet Aga. 2019. "The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes" Sustainability 11, no. 20: 5676. https://doi.org/10.3390/su11205676