The moderating effect of the interaction between joint audit and accounting conservatism on the association between corporate governance and corporate performance

Abstract

The study’s purpose is to examine the effects of corporate governance (CG) mechanisms on corporate performance (CP) and the moderating effect of the interaction between joint audit (JA) and accounting conservatism on this relationship in Egypt. From 2016 through 2020, the sample consisted of 61 non-financial Egyptian corporations listed. Panel data analysis with fixed-effect models was utilized to estimate the findings. The findings reveal that CG mechanisms as individual variables and CG index have a significant effect on CP by market- and accounting-based measures. The results also exhibit that the interaction between JA and accounting conservatism moderates and strengthens the relationship between the CG index and CP. The study’s unique contributions materialize in combining individual relationships into a comprehensive model. The model portrays the interaction between JA and accounting conservatism as a moderator in the relationship between CG mechanisms and CP. Furthermore, the study examines market- and accounting-based CP. The findings corroborate the literature and theoretical foundations of CG in emerging markets and focus on effective mechanisms for CG in various economic sectors. This study provides several practical implications for policymakers, auditors, corporations, shareholders, investors and practitioners, especially in emerging markets.