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Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy

This study investigates the relationship between the board of directors (BOD) and the audit committee (AC) mechanisms and earnings management (EM). Furthermore, it examines the moderating effect of family ownership and the whistle-blowing policy on the relationship. The study sample involves 864 Mal...

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Main Author: Al-Absy, Mujeeb Saif Mohsen
Format: Thesis
Language:English
English
English
English
Published: 2019
Subjects:
HD28-70 Management. Industrial Management
Online Access:https://etd.uum.edu.my/9428/1/depositpermission-not%20allow_s901846.pdf
https://etd.uum.edu.my/9428/2/s901846_01.pdf
https://etd.uum.edu.my/9428/3/s901846_02.pdf
https://etd.uum.edu.my/9428/4/s901846_references.docx
https://etd.uum.edu.my/9428/
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spelling my.uum.etd.94282022-05-29T10:06:08Z https://etd.uum.edu.my/9428/ Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy Al-Absy, Mujeeb Saif Mohsen HD28-70 Management. Industrial Management This study investigates the relationship between the board of directors (BOD) and the audit committee (AC) mechanisms and earnings management (EM). Furthermore, it examines the moderating effect of family ownership and the whistle-blowing policy on the relationship. The study sample involves 864 Malaysian firm-year observations, with the lowest average of return on assets for the period of 2013 to 2015. Jones and Roychowdhury Models were used to measure the accrual earnings management (AEM) and real earnings management (REM). This study reveals that board chairman’s tenure, women on the board, board chairman’s duality (board chairman is also the AC chairman) and AC chairman’s accounting expertise reduce AEM. However, board ethnic diversity, AC independence, board chairman as an ordinary member of the AC, AC accounting expertise and AC chairman’s multiple directorships increase AEM. Regarding REM, the results show that women on the board, board ethnic diversity and board chairman’s duality reduce REM. However, board independence, board chairman as ordinary member in the AC, AC chairman’s accounting expertise and women in the AC increase REM. Within the interaction effect of family ownership, corporate governance (CG) mechanisms do not have much of a role in mitigating AEM and REM. However, family ownership positively moderates the relationship between some CG mechanisms and EM, specifically chairman’s tenure (against AEM) and board ethnic diversity and AC chairman’s multiple directorships (against REM). Within the interaction effect of the whistle-blowing policy, there is a negative relationship between board ethnic diversity and board chairman’s duality with AEM and board ethnic diversity and AC independence with REM. This study alerts policymakers to re-evaluate and enhance the possibility of applying the current Code of CG in firms, in particular, those firms with family members on the board or the whistle-blowing policy. 2019 Thesis NonPeerReviewed text en https://etd.uum.edu.my/9428/1/depositpermission-not%20allow_s901846.pdf text en https://etd.uum.edu.my/9428/2/s901846_01.pdf text en https://etd.uum.edu.my/9428/3/s901846_02.pdf text en https://etd.uum.edu.my/9428/4/s901846_references.docx Al-Absy, Mujeeb Saif Mohsen (2019) Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy. Doctoral thesis, Universiti Utara Malaysia.
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Electronic Theses
url_provider http://etd.uum.edu.my/
language English
English
English
English
topic HD28-70 Management. Industrial Management
spellingShingle HD28-70 Management. Industrial Management
Al-Absy, Mujeeb Saif Mohsen
Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy
description This study investigates the relationship between the board of directors (BOD) and the audit committee (AC) mechanisms and earnings management (EM). Furthermore, it examines the moderating effect of family ownership and the whistle-blowing policy on the relationship. The study sample involves 864 Malaysian firm-year observations, with the lowest average of return on assets for the period of 2013 to 2015. Jones and Roychowdhury Models were used to measure the accrual earnings management (AEM) and real earnings management (REM). This study reveals that board chairman’s tenure, women on the board, board chairman’s duality (board chairman is also the AC chairman) and AC chairman’s accounting expertise reduce AEM. However, board ethnic diversity, AC independence, board chairman as an ordinary member of the AC, AC accounting expertise and AC chairman’s multiple directorships increase AEM. Regarding REM, the results show that women on the board, board ethnic diversity and board chairman’s duality reduce REM. However, board independence, board chairman as ordinary member in the AC, AC chairman’s accounting expertise and women in the AC increase REM. Within the interaction effect of family ownership, corporate governance (CG) mechanisms do not have much of a role in mitigating AEM and REM. However, family ownership positively moderates the relationship between some CG mechanisms and EM, specifically chairman’s tenure (against AEM) and board ethnic diversity and AC chairman’s multiple directorships (against REM). Within the interaction effect of the whistle-blowing policy, there is a negative relationship between board ethnic diversity and board chairman’s duality with AEM and board ethnic diversity and AC independence with REM. This study alerts policymakers to re-evaluate and enhance the possibility of applying the current Code of CG in firms, in particular, those firms with family members on the board or the whistle-blowing policy.
format Thesis
author Al-Absy, Mujeeb Saif Mohsen
author_facet Al-Absy, Mujeeb Saif Mohsen
author_sort Al-Absy, Mujeeb Saif Mohsen
title Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy
title_short Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy
title_full Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy
title_fullStr Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy
title_full_unstemmed Corporate governance mechanisms, accrual and real earnings management in Malaysia: the moderating role of family ownership and whistle-blowing policy
title_sort corporate governance mechanisms, accrual and real earnings management in malaysia: the moderating role of family ownership and whistle-blowing policy
publishDate 2019
url https://etd.uum.edu.my/9428/1/depositpermission-not%20allow_s901846.pdf
https://etd.uum.edu.my/9428/2/s901846_01.pdf
https://etd.uum.edu.my/9428/3/s901846_02.pdf
https://etd.uum.edu.my/9428/4/s901846_references.docx
https://etd.uum.edu.my/9428/
_version_ 1734302347022041088
score 13.211869

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