Audit Committee Characteristics, Board Diversity, and Fraudulent Financial Reporting in Malaysia
Asian Academy of Management Journal, 24(2), 143–167, 2019. DOI/10.21315/aamj2019.24.2.7
25 Pages Posted: 20 Apr 2020
Date Written: 2019
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.
Keywords: fraudulent financial reporting (FFR), audit committee, corporate governance, independence, expertise
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