5. Conclusion
The findings of the current study revealed that corporate governance attributes to improved firm value in long as well as short run. Establishment of internal audit committees as an effective internal audit system is essential for the enriched progress of a firm. Large and independent audit committees meeting more frequently not only mitigate information asymmetry problem between insiders and external stakeholder by ensuring credibility of accounting information but also exterminate the chances of fraudulent activities in firms. This enhances returns of firms’ assets as well as helping it to sustain long term standing in capital markets. Moreover, the quality of annual audit by a reputable auditing firm may also be used as external monitoring system and serves the same purpose. Moreover, the findings exhibited that, larger and independent boards which are free from the dual role of CEO help in enhancing firm value. Effective participation of directors in the board make it sure that decision of management is discussed in a good manner in board meetings and effective supervision and participation improve the firm value. Further, the opportunistic behavior of the managers is also not being mitigated by the lack of real independence discussed earlier. Furthermore, family influence on the firm is very much positive and firm value is enhanced in short-term. However, market does not perceive family involvement into business as a good phenomenon and lower value is being assigned by investors to firm with higher family ownership, both in small and large firms. Moreover, resource sharing by associated companies and technological and managerial skills import by foreigners give unmatched value to the firms. Whether the DEM is beneficial or opportunistic activity, the present study also answers this question by evaluating the impact of DEM of current and future firm value. It is found that DEM activity is destroying the long-term value in future. It is leading the future value of (one and two years) in negative way and same has been found for all the value measures of the study. Lastly, this value destroying behavior of DEM of corporate managers negatively moderates the corporate governance and firm value. Firms with earnings manipulation activities have weak implementation of corporate governance system and leads to lower firm value.
