Assessing The Impact of Firm’s Governance Mechanism on Integrated Reporting: The Moderating Role of Earnings Management

Abstract

This study examines the impact of corporate governance mechanisms on integrated reporting (IR) in Ghanaian firms listed on the Ghana Stock Exchange (GSE), focusing on the moderating role of earnings management (EM). Using stakeholder and agency theories, the research aims to understand how governance structures influence IR practices, particularly in an emerging market. A quantitative approach was employed, analyzing secondary data from the financial statements and annual reports of 38 listed firms over a 12-year period (2010-2022), supplemented by regulatory filings and industry reports to contextualize governance practices. The study utilized the generalized least squares (GLS) estimator for the main analysis and the fixed effects (FE) estimator for robustness testing. Findings reveal that CEO duality and ethics committee presence are negatively associated with IR, while board independence, gender diversity, age diversity, audit committees, and CSR committees positively influence IR. Importantly, while EM was found to negatively impact IR, it also positively moderates the relationship between governance mechanisms and IR, indicating a complex role in corporate governance. This study contributes to theoretical understanding by applying stakeholder and agency perspectives to corporate governance in emerging markets, where regulatory and institutional frameworks often differ from those in developed economies. Practically, the findings offer insights for policymakers, regulators, and corporate managers, emphasizing the need for strong governance structures that enhance transparency and sustainability in reporting. The study also highlights significant differences in governance practices between international and local firms, providing a foundation for tailored policies that encourage ethical and transparent corporate behavior within Ghana and the broader African market.