The Impact of Regulatory Sanctions to Auditor Independence: Some Evidence from Malaysia

25 Pages Posted: 20 Dec 2005

See all articles by Zulkarnain Muhamad Sori

Zulkarnain Muhamad Sori

INCEIF, The Global University of Islamic Finance

Yusuf Karbhari

Cardiff Business School

Date Written: December 2005

Abstract

This paper examines four issues relating to the impact of regulatory sanctions to auditor independence: peer review, risk of disciplinary action by professional bodies, risk of action by the investigation committee of the Malaysian Institute of Accountants (MIA) and effective enforcement measures. The majority of the auditors, loan officers and senior managers of Malaysian public listed companies that participated in this study agreed that auditor independence would be safeguarded on the existence of peer review programme and there are effective enforcement activities by the regulators. The risk of being referred to professional bodies' disciplinary committees and the Investigation Committee of the MIA has been regarded to safeguard independence.

Keywords: Regulatory sanctions, peer review, MIA, professional bodies, enforcement

JEL Classification: M49, M47

Suggested Citation

Muhamad Sori, Zulkarnain and Karbhari, Yusuf, The Impact of Regulatory Sanctions to Auditor Independence: Some Evidence from Malaysia (December 2005). Available at SSRN: https://ssrn.com/abstract=871141 or http://dx.doi.org/10.2139/ssrn.871141

Zulkarnain Muhamad Sori (Contact Author)

INCEIF, The Global University of Islamic Finance ( email )

Lorong Universiti A
Kuala Lumpur, Kuala Lumpur 59100
Malaysia
+60376514173 (Phone)
8 (Fax)

HOME PAGE: http://www.inceif.org/

Yusuf Karbhari

Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF1 3EU
United Kingdom
+ 44 0 29 2087 6057 (Phone)
+ 44 0 29 2087 4419 (Fax)

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