Title: Corporate governance mechanisms: interactions and impact on the financial performance of enterprises in Cameroon

Authors: Laurent Ndjanyou; Guy René Omenguele; Franclin Fietsop Nkemtang

Addresses: Department of Accounting and Finance, University of Dschang, P.O. Box 12557 Yaoundé, Cameroon ' Department of Accounting and Finance, University of Dschang, P.O. Box 12557 Yaoundé, Cameroon ' Department of Accounting and Finance, University of Dschang, P.O. Box 12557 Yaoundé, Cameroon

Abstract: The aim of this article is to analyse the impact of the interactions of corporate governance mechanisms on the financial performance of enterprises. The tests conducted on a sample of 40 limited liability companies in Cameroon reveal that audit improves on the financial performance of companies despite the numerous questions that surround its reputation and shortcomings in its practice in Cameroon. Our results also support the hypotheses of substitution and complementarities between mechanisms of corporate governance. Thus, the perceived notion of the reputation of external audit no more constitute a prerogative to shareholders as well as managers due to the effect of substitutability between the efficiency of control exercise by the major shareholder and the presence of independent board members. But audit complements the efforts of concentrated ownership to create more value for the shareholders when valued by the variation of earnings.

Keywords: external audit reputation; interactions; corporate governance mechanisms; financial performance; firm performance; Cameroon.

DOI: 10.1504/AJAAF.2015.072216

African Journal of Accounting, Auditing and Finance, 2015 Vol.4 No.2, pp.87 - 106

Received: 20 Apr 2015
Accepted: 23 Apr 2015
Published online: 05 Oct 2015 *

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