Purpose

This study aims to address a research gap by examining the relationship between CEO power, board strength and earnings quality in Gulf Cooperation Council (GCC) countries, a region with distinctive economic and governance characteristics. It explores how governance mechanisms impact financial reporting in a context marked by significant corruption challenges and regulatory dynamics. The paper underscores the relevance of the GCC setting because of its unique blend of rapid economic reform, policy shifts toward diversification and evolving governance frameworks influenced by Islamic principles.

Design/methodology/approach

This study uses 5,030 firm-year observations from GCC countries over the period 2003–2022. To test the study’s hypotheses, the authors apply the System Generalized Method of Moments.

Findings

The study reveals a significant negative correlation between perceived corruption and earnings quality, with higher corruption leading to lower earnings quality. It finds that CEO power further diminishes earnings quality and intensifies corruption’s negative effects on financial reporting while strong board governance positively affects earnings quality and reduces the adverse impact of corruption.

Originality/value

By focusing on the GCC – a region undergoing significant regulatory reforms and policy changes – this study enriches the discourse on earnings quality within emerging markets. It provides novel insights into how corruption, CEO power and board strength interact to influence financial reporting quality, offering actionable implications for policymakers and stakeholders navigating these unique economic and governance landscapes.

العنوان

Journal of Financial Reporting and Accounting

الناشر

Emerald Group Publishing Ltd.,

بلد الناشر

المملكة المتحدة

Indexing

Scopus

معامل التأثير

9,2

نوع المنشور

Both (Printed and Online)

المجلد

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السنة

2025

الصفحات

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