Corporate Governance Mechanisms and the Quality of Financial Reporting: An Empirical Study of Public Limited Companies in Cameroon

Abstract

The objective of this article is to examine the effect of corporate governance mechanisms on the quality of financial reporting in public limited companies in Cameroon. To achieve this aim, questionnaires were mainly exploited from a sample of 75 selected public limited companies in Cameroon. In the framework of this study, two models are constructed and a set of hypotheses formulated. These models are examined by a descriptive and multivariate analysis. The study results reveal that international audit firms, audit mandates and audit fee have a positive but no significant influence on the quality of financial reporting. Meanwhile, this finding also indicates that ownership concentration, managerial ownership and institutional ownership have a negative and a significant influence on the quality of financial reporting. This article recommends that there should be a well-constituted corporate governance board for all companies and harmonisation codes of corporate governance enhancing the uniform policies everywhere. This study also concludes that good corporate governance plays a key role in enhancing financial reporting quality in PLC in Cameroon.

Jel Classification: M40

Paper Type: empirical research