The mediating effect of going concern and corporate reporting in the relationship between corporate governance and investor confidence in financial institutions

Abstract

This study investigates the mediating role of going concern and corporate reporting on the relationship between corporate governance and investor confidence in financial institutions. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 3 to analyze the data. The data for the study was collected from financial statements of selected commercial banks in Ghana, Nigeria and South Africa. The results indicate that corporate reporting partially mediates the interrelationships between corporate governance, going concern, and investor confidence. Conversely, there is neither mediation effect of going concern on the association between corporate reporting and investor confidence, nor between corporate governance and investor confidence. The results of the study have practical implications for financial institutions looking to maintain investor confidence and promote financial stability. The results also have policy implications for policymakers and regulators that oversee financial institutions. Knowledge in the field of corporate reporting and governance theoretically also is extended by highlighting the importance of transparency and disclosure in corporate reporting practices. In all, this study contributes to the literature on corporate governance and reporting by providing new insights into the mechanisms by which corporate reporting and going concern impact corporate governance and investor confidence in financial institutions.

Keywords

• Corporate governance
• Corporate reporting
• Financial institutions
• Going concern
• Investor confidence