Equifinality and Financial Reporting Quality: A Configurational Analysis of Governance Practices in Contemporary Corporate Settings
Year: 2025
Type: article
Abstract: The relationship between corporate governance mechanisms and financial reporting quality (FRQ) remains a central concern for policymakers and scholars, particularly within emerging economies where institutional frameworks may be weak. This study examines how internal controls, audit committee characteristics, executive accountability, ownership concentration, and regulatory quality influence FRQ, using firm-level data drawn from 210 companies in an emerging market over the period 2015–2022. Employing a combination of linear regression and qualitative comparative analysis (QCA), the results indicate that while internal controls exhibit a positive yet statistically weak association with FRQ, other mechanisms such as audit committee effectiveness, executive accountability, and ownership concentration do not show significant independent effects. The QCA highlights that specific combinations of governance mechanisms, rather than individual components, are associated with higher FRQ, aligning with recent configurational perspectives on corporate governance. These findings suggest that isolated reforms targeting single governance elements may be insufficient without broader institutional strengthening. The study recommends an integrated policy approach that enhances internal governance while simultaneously improving external enforcement, legal protections for minority shareholders, and regulatory capacity. Such measures can foster greater transparency, investor confidence, and sustainable economic development in emerging markets.
Author: Kamaldeen Ibraheem Nageri
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4416056524