The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies
The role of audit governance mechanisms as part of the corporate governance architecture has been promoted to ensure the integrity of the financial reporting process. In order to get insights on their effectiveness, this study investigates the effects of the audit governance mechanism, specifically...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2022
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| Online Access: | http://journalarticle.ukm.my/21076/ http://journalarticle.ukm.my/21076/1/50921-200164-2-PB.pdf |
| _version_ | 1848815265756741632 |
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| author | Ma, Wyei Leng Noor Adwa Sulaiman, Azlina Abdul Jalil, |
| author_facet | Ma, Wyei Leng Noor Adwa Sulaiman, Azlina Abdul Jalil, |
| author_sort | Ma, Wyei Leng |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | The role of audit governance mechanisms as part of the corporate governance architecture has been promoted to ensure the integrity of the financial reporting process. In order to get insights on their effectiveness, this study investigates the effects of the audit governance mechanism, specifically audit committee, internal audit function and external audit quality on earnings management in Malaysian government-linked companies. Using a cross-sectional variation of the modified Jones Model (1995) to estimate discretionary accruals, this study examined 38 GLCs from 2009–2018, which consisted of 340 firm-year pair observations. Panel data regression analysis was carried out using the generalised least square method to analyse the effect of audit governance mechanisms on earnings management. The findings suggest that lower likelihood of earnings management is associated with the internal audit function. Further analysis on the proxy of internal audit measures suggests that in-house internal audit function is negatively associated with earnings management. This research would provide insights for regulators and management to strengthen in-house internal audit function in order to mitigate earnings management in Malaysian government-linked companies |
| first_indexed | 2025-11-15T00:47:14Z |
| format | Article |
| id | oai:generic.eprints.org:21076 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:47:14Z |
| publishDate | 2022 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:210762023-02-09T05:32:42Z http://journalarticle.ukm.my/21076/ The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies Ma, Wyei Leng Noor Adwa Sulaiman, Azlina Abdul Jalil, The role of audit governance mechanisms as part of the corporate governance architecture has been promoted to ensure the integrity of the financial reporting process. In order to get insights on their effectiveness, this study investigates the effects of the audit governance mechanism, specifically audit committee, internal audit function and external audit quality on earnings management in Malaysian government-linked companies. Using a cross-sectional variation of the modified Jones Model (1995) to estimate discretionary accruals, this study examined 38 GLCs from 2009–2018, which consisted of 340 firm-year pair observations. Panel data regression analysis was carried out using the generalised least square method to analyse the effect of audit governance mechanisms on earnings management. The findings suggest that lower likelihood of earnings management is associated with the internal audit function. Further analysis on the proxy of internal audit measures suggests that in-house internal audit function is negatively associated with earnings management. This research would provide insights for regulators and management to strengthen in-house internal audit function in order to mitigate earnings management in Malaysian government-linked companies Penerbit Universiti Kebangsaan Malaysia 2022 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/21076/1/50921-200164-2-PB.pdf Ma, Wyei Leng and Noor Adwa Sulaiman, and Azlina Abdul Jalil, (2022) The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies. Jurnal Pengurusan, 66 . pp. 53-65. ISSN 0127-2713 https://ejournal.ukm.my/pengurusan/issue/view/1569 |
| spellingShingle | Ma, Wyei Leng Noor Adwa Sulaiman, Azlina Abdul Jalil, The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies |
| title | The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies |
| title_full | The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies |
| title_fullStr | The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies |
| title_full_unstemmed | The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies |
| title_short | The audit committees, internal audit and external audit quality effects on earnings management : an analysis of Malaysian government-linked companies |
| title_sort | audit committees, internal audit and external audit quality effects on earnings management : an analysis of malaysian government-linked companies |
| url | http://journalarticle.ukm.my/21076/ http://journalarticle.ukm.my/21076/ http://journalarticle.ukm.my/21076/1/50921-200164-2-PB.pdf |