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

See all articles by Marziana Madah Marzuki

Marziana Madah Marzuki

Universiti Teknologi MARA (UiTM) - Faculty of Accountancy

Noor Marini Haji-Abdullah

Universiti Teknologi MARA (UiTM)

Rohana Othman

Universiti Teknologi MARA (UiTM)

Effiezal Aswadi Abdul Wahab

Curtin University - School of Accounting

Iman Harymawan

Universitas Airlangga

Date Written: 2019

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.

Keywords: fraudulent financial reporting (FFR), audit committee, corporate governance, independence, expertise

Suggested Citation

Marzuki, Marziana Madah and Haji-Abdullah, Noor Marini and Othman, Rohana and Abdul Wahab, Effiezal Aswadi and Harymawan, Iman, Audit Committee Characteristics, Board Diversity, and Fraudulent Financial Reporting in Malaysia (2019). Asian Academy of Management Journal, 24(2), 143–167, 2019. DOI/10.21315/aamj2019.24.2.7, Available at SSRN: https://ssrn.com/abstract=3561997

Marziana Madah Marzuki

Universiti Teknologi MARA (UiTM) - Faculty of Accountancy ( email )

Menara SAAS
Level 11, UiTM
Shah Alam, Selangor 40500
Malaysia

Noor Marini Haji-Abdullah

Universiti Teknologi MARA (UiTM) ( email )

40450 Shah Alam
Johor
Dungun, Selangor 23000
Malaysia

Rohana Othman

Universiti Teknologi MARA (UiTM) ( email )

Effiezal Aswadi Abdul Wahab

Curtin University - School of Accounting ( email )

Australia

Iman Harymawan (Contact Author)

Universitas Airlangga ( email )

JL. Airlangga no 4
Surabaya, East Java 60286
Indonesia

HOME PAGE: http://www.feb.unair.ac.id

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