Audit Committees and Financial Reporting Quality Following the Government Transformation Program: Evidence from Malaysia

AKEPT Annual Young Researchers X³, 2011

11 Pages Posted: 17 Dec 2011 Last revised: 13 Feb 2012

See all articles by Sherliza Puat Nelson

Sherliza Puat Nelson

International Islamic University of Malaysia (IIUM)

Nurul Nazlia Jamil

Manchester Business School

Date Written: December 16, 2011

Abstract

The main objective of this study is to investigate the impact of Green Book’s implementation through Government Transformation programme in improving financial reporting quality among Malaysian GLCs. Results show an agitation finding whereby no evidence was found to support the hypotheses. Nevertheless, results were significant on the year when transformations were made. Agency theory and resource dependence theory presented as the theory used to explain audit committee, as a monitoring mechanism and reduce the agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. However, much to my keenness, the theories were not supported hence delineating other alternative theories in gaining further understanding the relationship between audit committee and financial reporting quality. The introduction of the Green Book to strengthen the board’s effectiveness had shown otherwise. Consequently, provide some room for improvement for future research to collaborate other theoretical explanation that could explain these findings.

Keywords: Audit committees, Financial Reporting Quality, GTP, Earnings Management, GLC, Malaysia

JEL Classification: M40, M42, M48

Suggested Citation

Nelson, Sherliza Puat and Jamil, Nurul Nazlia, Audit Committees and Financial Reporting Quality Following the Government Transformation Program: Evidence from Malaysia (December 16, 2011). AKEPT Annual Young Researchers X³, 2011, Available at SSRN: https://ssrn.com/abstract=1973670

Sherliza Puat Nelson

International Islamic University of Malaysia (IIUM) ( email )

Department of Accounting, KENMS
P.O.Box 10, Jalan Sg Pusu
Kuala Lumpur, 50728
Malaysia

Nurul Nazlia Jamil (Contact Author)

Manchester Business School ( email )

Booth Street West
Manchester, UT M15 6PB
United Kingdom

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