The moderating effect of audit quality on audit committee and financial reporting quality in Malaysia

• Main Author: Shahanif, Hasan
• Format: Thesis
• Language: English; English
• Published: 2017
• Subjects: HF5667 Professional Ethics. Auditors.
• Online Access: https://etd.uum.edu.my/6723/1/s819355_01.pdf; https://etd.uum.edu.my/6723/2/s819355_02.pdf; https://etd.uum.edu.my/6723/

This study aims to investigate the relationship between the audit committee and audit quality on financial reporting quality. Specifically, studies on the impact of audit quality and on audit committee financial reporting quality in Malaysia have critical implications for Malaysia and this suggests to examine the significant effect of Audit Committee on Financial Reporting Quality (Earning Management). The study used financial statements of 93 of listed trading companies from 2013 to 2015 on Bursa Malaysia. Data from the financial statements were analysed with multiple regression analytical technique. Thus, this study investigates impacts of audit quality and audit committee financial reporting quality in Malaysia. The results show that the audit committee had a significantly and no significantly relationship with financial reporting quality. Based on finding audit committee independence, audit committee financial expertise, audit committee size is not supported and no significance, just audit committee meeting have a supported and significant results. As the size of audit committee increased, financial reporting quality was improved. However, this study reveals that a decreased quality of financial reporting may be a result from arisen discretionary accruals. Finally, when Audit Quality is treated as a moderator variable, there is no significant moderating impact on the relationship between Audit Committee and Financial Reporting (EM-Discretionary Accruals). This indicates that financial reporting was prepared according to generally accepted accounting standards. Therefore, understanding moderate effect of Audit Quality on Audit Committee and Financial Reporting Quality proxy Earnings Management (Discretionary Accruals) as an intervening variable could be a valuable future research field to venture.