2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee
| Format: | General Document |
|---|
| _version_ | 1860798360077729792 |
|---|---|
| building | INTELEK Repository |
| collection | Online Access |
| collectionurl | https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection8791 |
| copyright | Copyright©PWB2026 |
| country | Malaysia |
| date | 2025-04-30 |
| format | General Document |
| id | 17457 |
| institution | UniSZA |
| originalfilename | 17457_f83e0404dfc6b36.pdf |
| person | Elhusin Blkasem Mohammed Elhaj |
| recordtype | oai_dc |
| resourceurl | https://intelek.unisza.edu.my/intelek/pages/view.php?ref=17457 |
| sourcemedia | Server storage Scanned document |
| spelling | 17457 https://intelek.unisza.edu.my/intelek/pages/view.php?ref=17457 https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection8791 General Document Malaysia Library Staff (Top Management) Library Staff (Management) Library Staff (Support) Terengganu Faculty of Business and Management English application/pdf 1.7 Microsoft® Word 2019 Public Access Server storage Scanned document Universiti Sultan Zainal Abidin Universiti Sultan Zainal Abidin Audit Quality Ownership Structure Dissertations, Academic 2025-04-30 Copyright©PWB2026 Thesis Bursa Malaysia Corporate governance -- Malaysia Risk management -- Malaysia Corporate Governance Elhusin Blkasem Mohammed Elhaj Accrual Earnings Management Separate Risk Management Committee (SRMC) Agency Theory Resource Dependence Theory Panel Corrected Standard Errors (PCSEs) STATA 14 Earnings management -- Malaysia Boards of directors -- Malaysia Financial statements -- Malaysia Audit committees -- Malaysia 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee Earnings manipulation has become a global concern for all stakeholders and regulators. The incessant manipulations of corporate financial statements globally in the past few years have led to several scandals and failures. This phenomenon has resulted in serious threats to the reliability of financial reporting. Today, businesses begin to pay attention to corporate governance structure and risk management committee (RMC) as a mean to reduce financial scandals and business malpractices. Generally, the objective of this study is to examine the impact of corporate governance mechanisms which are board of directors, audit committee, audit quality and ownership structure on accrual earnings management with separate risk management committee as a mediator. A separate risk management committee (SRMC) provides additional governance mechanism to the existing roles of the board of directors, audit committee and auditor, among others. This study uses two theories namely, agency theory and resource dependence theory which have been used extensively in studies of earnings manipulations and corporate governance. This study used secondary data whereby the data was extracted from the annual reports of top 266 public companies listed on Bursa Malaysia between 2013 and 2018. The data was obtained from the annual reports of 1,596 firm-year observations for six years. Panel Corrected Standard Errors (PCSEs) was used to analyze the data. This study employed STATA 14 statistical software package to test the hypotheses developed. Overall, the results show that board size, audit committee independence, audit quality (proxied by the Big Four firms) and family ownership have negative and significant effects on accrual earnings management. However, foreign ownership has negative but insignificant. The results further indicated that the independence of board directors, audit committee financial expertise and audit quality (proxied by audit fee) have positive and significant effects on accrual earnings management. The study also revealed that board independence, audit committee independence, audit quality (proxied by the Big Four firms and audit fee) and foreign ownership have positive significant effects on SRMC. Further, board size has positive but insignificant. On the contrary, audit committee financial expertise and family ownership have negative and significant effects on SRMC. In addition, the mediation model shows that SRMC fully and significantly mediates the relationships between audit committee independence and accrual earnings management. However, SRMC partially and significantly mediates the relationship between board size, audit quality (proxied by the Big Four firms), foreign ownership and accrual earnings management. The results provide new evidence on the importance of SRMC as a mediator in enhancing financial reporting quality. The established SRMC in non-financial firms are likely to reduce managers from involving in accrual earnings management by controlling and managing risks, thus, SRMC acts as an effective monitoring mechanism in support of the agency theory. The findings of this study provide useful insights to investors, managers, policymakers, and creditors especially concerning issues relating to financial reporting quality; corporate governance structures and risk management committee. However, only limited broad characteristic variables were examined in this study. Therefore, future research may consider other board characteristics variables not considered in this study (i.e., board gender diversity, board financial expertise and board tenure). A new study may include family ownership concentration (FMOC) as a moderator variable in the research design, which is likely to have a higher propensity to affect earnings manipulation. uuid:D53F48F3-DAC6-4C7A-9142-29480CDEE368 17457_f83e0404dfc6b36.pdf 481 |
| spellingShingle | 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee |
| state | Terengganu |
| subject | Dissertations, Academic Corporate governance -- Malaysia Risk management -- Malaysia Earnings management -- Malaysia Boards of directors -- Malaysia Financial statements -- Malaysia Audit committees -- Malaysia |
| summary | Earnings manipulation has become a global concern for all stakeholders and regulators. The incessant manipulations of corporate financial statements globally in the past few years have led to several scandals and failures. This phenomenon has resulted in serious threats to the reliability of financial reporting. Today, businesses begin to pay attention to corporate governance structure and risk management committee (RMC) as a mean to reduce financial scandals and business malpractices. Generally, the objective of this study is to examine the impact of corporate governance mechanisms which are board of directors, audit committee, audit quality and ownership structure on accrual earnings management with separate risk management committee as a mediator. A separate risk management committee (SRMC) provides additional governance mechanism to the existing roles of the board of directors, audit committee and auditor, among others. This study uses two theories namely, agency theory and resource dependence theory which have been used extensively in studies of earnings manipulations and corporate governance. This study used secondary data whereby the data was extracted from the annual reports of top 266 public companies listed on Bursa Malaysia between 2013 and 2018. The data was obtained from the annual reports of 1,596 firm-year observations for six years. Panel Corrected Standard Errors (PCSEs) was used to analyze the data. This study employed STATA 14 statistical software package to test the hypotheses developed. Overall, the results show that board size, audit committee independence, audit quality (proxied by the Big Four firms) and family ownership have negative and significant effects on accrual earnings management. However, foreign ownership has negative but insignificant. The results further indicated that the independence of board directors, audit committee financial expertise and audit quality (proxied by audit fee) have positive and significant effects on accrual earnings management. The study also revealed that board independence, audit committee independence, audit quality (proxied by the Big Four firms and audit fee) and foreign ownership have positive significant effects on SRMC. Further, board size has positive but insignificant. On the contrary, audit committee financial expertise and family ownership have negative and significant effects on SRMC. In addition, the mediation model shows that SRMC fully and significantly mediates the relationships between audit committee independence and accrual earnings management. However, SRMC partially and significantly mediates the relationship between board size, audit quality (proxied by the Big Four firms), foreign ownership and accrual earnings management. The results provide new evidence on the importance of SRMC as a mediator in enhancing financial reporting quality. The established SRMC in non-financial firms are likely to reduce managers from involving in accrual earnings management by controlling and managing risks, thus, SRMC acts as an effective monitoring mechanism in support of the agency theory. The findings of this study provide useful insights to investors, managers, policymakers, and creditors especially concerning issues relating to financial reporting quality; corporate governance structures and risk management committee. However, only limited broad characteristic variables were examined in this study. Therefore, future research may consider other board characteristics variables not considered in this study (i.e., board gender diversity, board financial expertise and board tenure). A new study may include family ownership concentration (FMOC) as a moderator variable in the research design, which is likely to have a higher propensity to affect earnings manipulation. |
| title | 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee |
| title_full | 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee |
| title_fullStr | 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee |
| title_full_unstemmed | 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee |
| title_short | 2025_The Effects of Corporate Go Vernance Mechanism On Accrual Earnings Management and The Mediating Role of Separate Risk Management Committee |
| title_sort | 2025_the effects of corporate go vernance mechanism on accrual earnings management and the mediating role of separate risk management committee |