Audit committee characteristics, board diversity, and fraudulent financial reporting in Malaysia

Marziana Madah Marzuki; Noor Marini Haji-Abdullah; Rohana Othman; Effiezal Aswadi Abdul Wahab; Iman Harymawan

doi:10.21315/aamj2019.24.2.7

Audit committee characteristics, board diversity, and fraudulent financial reporting in Malaysia

Marziana Madah Marzuki
, Noor Marini Haji-Abdullah
, Rohana Othman
, Effiezal Aswadi Abdul Wahab
, Iman Harymawan

Research output: Contribution to journal › Article › peer-review

15 Citations (Scopus)

Abstract

We investigate the relationship between audit committee characteristics, board diversity, and the propensity of committing fraud among Malaysian firms. Based on a matched-pair sample of 64 observations for the years 2002–2014, we find limited evidence to suggest that audit committee characteristics matters. However, we find a negative relationship between the percentage of female directors and the likelihood of fraud. Results highlight the importance of the audit committee (in) effectiveness and the relative importance of female directors in Malaysia. Our results are robust when we consider a structural change in corporate governance policies in Malaysia.

Original language	English
Pages (from-to)	143-167
Number of pages	25
Journal	Asian Academy of Management Journal
Volume	24
Issue number	2
DOIs	https://doi.org/10.21315/aamj2019.24.2.7
Publication status	Published - 2019

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 5 Gender Equality

Keywords

Audit committee
Corporate governanceindependence
Expertise
Fraudulent financial reporting (FFR)

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10.21315/aamj2019.24.2.7

Cite this

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title = "Audit committee characteristics, board diversity, and fraudulent financial reporting in Malaysia",

abstract = "We investigate the relationship between audit committee characteristics, board diversity, and the propensity of committing fraud among Malaysian firms. Based on a matched-pair sample of 64 observations for the years 2002–2014, we find limited evidence to suggest that audit committee characteristics matters. However, we find a negative relationship between the percentage of female directors and the likelihood of fraud. Results highlight the importance of the audit committee (in) effectiveness and the relative importance of female directors in Malaysia. Our results are robust when we consider a structural change in corporate governance policies in Malaysia.",

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AU - Marzuki, Marziana Madah

AU - Haji-Abdullah, Noor Marini

AU - Othman, Rohana

AU - Wahab, Effiezal Aswadi Abdul

AU - Harymawan, Iman

N1 - Publisher Copyright: © Asian Academy of Management and Penerbit Universiti Sains Malaysia, 2019.

PY - 2019

Y1 - 2019

N2 - We investigate the relationship between audit committee characteristics, board diversity, and the propensity of committing fraud among Malaysian firms. Based on a matched-pair sample of 64 observations for the years 2002–2014, we find limited evidence to suggest that audit committee characteristics matters. However, we find a negative relationship between the percentage of female directors and the likelihood of fraud. Results highlight the importance of the audit committee (in) effectiveness and the relative importance of female directors in Malaysia. Our results are robust when we consider a structural change in corporate governance policies in Malaysia.

AB - We investigate the relationship between audit committee characteristics, board diversity, and the propensity of committing fraud among Malaysian firms. Based on a matched-pair sample of 64 observations for the years 2002–2014, we find limited evidence to suggest that audit committee characteristics matters. However, we find a negative relationship between the percentage of female directors and the likelihood of fraud. Results highlight the importance of the audit committee (in) effectiveness and the relative importance of female directors in Malaysia. Our results are robust when we consider a structural change in corporate governance policies in Malaysia.

KW - Audit committee

KW - Corporate governanceindependence

KW - Expertise

KW - Fraudulent financial reporting (FFR)

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VL - 24

SP - 143

EP - 167

JO - Asian Academy of Management Journal

JF - Asian Academy of Management Journal

IS - 2

ER -

Audit committee characteristics, board diversity, and fraudulent financial reporting in Malaysia

Abstract

UN SDGs

Keywords

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