Corporate Governance in The Kingdom of Saudi Arabia Dissertation

Corporate Governance in The Kingdom of Saudi Arabia - Dissertation Example ance and the Role of Auditors in the KSA 26 Synthesis of the Review 28 Chapter 3: Methodology 30 Introduction 30 Research Approach 30 Research Design 30 Specification of Variables 31 Hypotheses 33 Sampling Technique 35 Methods and Materials 36 Reliability and Validity 36 Data-Collection Procedure 36 Ethical Considerations 37 Method of Data Analysis 37 Conclusion 38 Chapter 4: Results and Discussion 39 Introduction 39 Results 39 Discussion 60 Chapter 5: Conclusions and Recommendations 65 Conclusions 65 Recommendations 67 List of Tables Table 1. Independent and Dependent Variables 31 Table 2. Demographic Traits 32 Table 3. Research Questions with Corresponding Alternative Hypotheses 33 Table 4. Descriptive statistics: Evaluations of corporate governance (Internal Auditors) 40 Table 5. Descriptive statistics: Facets of the auditor’s role influenced by corporate governance (Internal Auditors) 42 Table 6. T-test: Facets of the auditor’s role influenced by corporate governanc e (Internal Auditors) 43 Table 7a. Coefficient of determination: Evaluations of corporate governance vs. overall success of corporate governance as regards the auditor’s role (Internal Auditors) 44 Table 7b. One-way ANOVA: Evaluations of corporate governance vs. overall success of corporate governance as regards the auditor’s role (Internal Auditors) 45 Table 7c. Beta coefficients: Evaluations of corporate governance vs. overall success of corporate governance to the auditor role (Internal Auditors) 46 Table 8. Descriptive statistics: Evaluations of corporate governance (External Auditors) 47 Table 9. Descriptive statistics: Facets of the auditor’s role influenced by corporate governance (Internal Auditors) 50 Table 10. T-test: Facets of the auditor’s role influenced by corporate governance... Following the major recent scandals involving accountants and their tendency to restate earnings, as well as the collapse of Enron and WorldCom, various calls for reform have been made, particularly in the field of management, external auditing and corporate governance (Brown 2005; Deakin & Konzelmann 2004). Research that delves into the matter at hand has highlighted the importance of the so-called â€Å"corporate governance mosaic†, which generally emphasises the critical role of the interactions among the important parties involved in financial reporting (Ali 1999). Moreover, researchers have given attention to how the corporate governance initiative of organisations significantly affects the processes related to financial reporting and auditing. It has likewise been argued that the auditors, together with the board of directors, must work hand in hand towards the betterment of the auditing process in accordance with the principles of corporate governance (Cohen, Krishnamoo rthy & Wright 2007; Dewing & Russell 2004). Strong corporate governance positively affects the quality of financial reports in a sense that it minimizes the incidence of fraud, fewer restatements and lower earnings of the management (Cohen et al. 2007). The nature and strength with which organisations carry out their initiatives pertaining to corporate governance significantly affect the audit process. Furthermore, actors involved in the advancement of corporate governance initiatives are also likely to be more responsible in ensuring that financial reporting is of high quality (Abbott, Parker & Peters 2004). Finally, it is also through the proper adoption of the principles of corporate governance that auditors are enabled to solve their disputes with clients. The relationship of corporate governance and the role of the auditors has indeed been the subject of many studies (Abbott, Parker & Peters 2004; International Organisations of Securities Commissions). Additionally, researchers who have undertaken studies in relation to the topic have all underscored the fact that the corporate governance system helps in preventing the collapse of corporations. The relationship between the two is also based on the role of auditors in ensuring the quality of the financial reports (Krishnan n.d.). In view of this, this research aims to look into how corporate governance influences the role of the auditors in the context of companies in the KSA.