Study On The Effect Of Corporate Governance On Accounting Information Quality In Yemen

This study is trying to explain how the application of corporate governance in Yemen helps to maximize the performance of companies. The application of corporate governance could also help to reduce the material and spiritual conflicts of interest by establishing laws and statutes. This study argues that there are moral links between the application of corporate governance and the quality of accounting information. This study probes the importance of the application of corporate governance in the economic environment and the benefit from the accounting practice and the development of the audit profession in order to achieve the quality of accounting information which meets the requirements of environmental accounting of Yemen.The existing principles of corporate governance of Yemen include mainly the roles and responsibilities of the board, stockholder’s rights and equity, other shareholders’ rights, encourage honesty and moral behaviors and increase the degree of accounting information disclosure and transparency. This study aims at evaluating to what extent the companies of Yemen follow the principles of the corporate governance. In order to achieve the object, we conducted a systematic review of available literature, such as academic reports, journals and research reports done by masters and doctors of related fields. Besides, this study, with the questionnaires from 100 subjects of Yemen companies, utilizes the descriptive statistical indicators and SPSS to analyze the data.The main finding of this study is that Yemeni companies can’t stick to the corporate governance principles very well. This paper also points out the errors of Yemen companies in the implementation of corporate governance. The main causes of these errors lay in the violation of the ethical rules and social obligations, preventing the shareholders from attending the board meeting, the unfair salary system when competes with other companies and not allowing any independent agencies to release any related data.Therefore, in according with what has mentioned above, it is suggested that the regulators would encourage the Yemen companies to observe the principles of corporate governance and honest trade, adopt more transparent international accounting standards and establish a local stock exchange in Yemen. This paper proves that the factor of corporate governance is crucially important for the quality of accounting information.