The influence of governance mechanisms to related party transactions of Philippine publicly listed firms: An innerstudy of its impact on earnings quality

Date of Publication


Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Accountancy


Ramon V. Del Rosario College of Business



Thesis Adviser

Wilfredo A. Baltazar

Defense Panel Member

Herminigilda E. Salendrez
Mark Vincent B. Bendo


Given that related party transactions had been used as a vehicle to commit fraud in the past, this study shall aim to identify how it would affect stakeholders by looking into its relationship with earnings quality in the Philippine setting. The study shall also delve into corporate governance mechanisms and their effect to related party transaction and earnings quality. There are three phases involved: the first phase will seek to establish the relationship between corporate governance and related party transactions, the second phase will test the association between related party transactions and earnings quality and finally, corporate governance and earnings quality will be linked.

Using a panel data regression analysis and simultaneous equations model, this research discovers that there is a significant relationship between corporate governance mechanisms and related party disclosure index, which was the chosen proxy for related party transactions. Specifically, the mechanisms board size and firm age are inversely related with related party transactions while CEO (chief executive officer) duality and firm size have shown a direct relation. A statistically significant relationship have also been noted in the second phase such that as the related party disclosure index increases, earnings quality decreases. Finally, the third phase shows that corporate governance mechanisms significantly affect earnings quality. Particularly, the significant mechanisms that were found to be inversely related with earnings quality were board independence, board size, and CEO duality.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

xi, 356 leaves : illustrations ; 28 cm. + 1 computer disc ; 4 3/4 in.


Corporate governance--Philippines; Related party transactions--Philippines; Corporate profits--Philippines

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