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The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia

In recent decades, there has been a noticeable increase in the practice of earnings management through accrual and especially real activities, with effect on the quality of financial statements. The role of the ownership structure in mitigating earnings management remains ambiguous because of inconc...

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Main Author: Al-Duais, Shaker Dahan Ahmed
Format: Thesis
Language:English
English
English
Published: 2019
Subjects:
HF5667 Professional Ethics. Auditors.
Online Access:https://etd.uum.edu.my/9473/1/depositpermission_s900301.pdf
https://etd.uum.edu.my/9473/2/s900301_01.pdf
https://etd.uum.edu.my/9473/3/s900301_references.docx
https://etd.uum.edu.my/9473/
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spelling my.uum.etd.94732022-06-07T02:07:09Z https://etd.uum.edu.my/9473/ The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia Al-Duais, Shaker Dahan Ahmed HF5667 Professional Ethics. Auditors. In recent decades, there has been a noticeable increase in the practice of earnings management through accrual and especially real activities, with effect on the quality of financial statements. The role of the ownership structure in mitigating earnings management remains ambiguous because of inconclusive findings. Therefore, this study examines the influence of ownership structure (family, managerial, dedicated institutional, transient institutional and foreign) on earnings management (accruals and real activities). In addition, the audit committee is investigated as a moderator between these types of ownership and earnings management. The study used the panel data regression approach with 1,960 firm-year observations of non-financial firms listed on the Bursa Malaysia over the period 2013 to 2016. The results show that family ownership leads to less aggressive earnings management practice in both types, accruals and real activities. The findings also show that dedicated and transient institutional investors have a significant role in restricting the real earnings management. However, the results indicate insignificant effects of managerial ownership and foreign ownership on real earnings management. Audit committee effectiveness is found to significantly moderate the relationship between family, managerial and transient institutional ownership with real earnings management, whereas it only moderates the relationship between dedicated institutional and foreign ownership with accruals earnings management. Based on the findings, this study contributes to better understanding of the ownership structure and earnings management practices among Malaysian listed firms. The results suggest that firms should improve the effectiveness of audit committees to enhance their financial reporting quality. Overall, this study provides a reference point for the relevant parties such as regulatory bodies, policymakers and standard setters towards improving the quality of earnings and corporate governance practices in ensuring credible accounting information. 2019 Thesis NonPeerReviewed text en https://etd.uum.edu.my/9473/1/depositpermission_s900301.pdf text en https://etd.uum.edu.my/9473/2/s900301_01.pdf text en https://etd.uum.edu.my/9473/3/s900301_references.docx Al-Duais, Shaker Dahan Ahmed (2019) The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia. 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
topic HF5667 Professional Ethics. Auditors.
spellingShingle HF5667 Professional Ethics. Auditors.
Al-Duais, Shaker Dahan Ahmed
The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia
description In recent decades, there has been a noticeable increase in the practice of earnings management through accrual and especially real activities, with effect on the quality of financial statements. The role of the ownership structure in mitigating earnings management remains ambiguous because of inconclusive findings. Therefore, this study examines the influence of ownership structure (family, managerial, dedicated institutional, transient institutional and foreign) on earnings management (accruals and real activities). In addition, the audit committee is investigated as a moderator between these types of ownership and earnings management. The study used the panel data regression approach with 1,960 firm-year observations of non-financial firms listed on the Bursa Malaysia over the period 2013 to 2016. The results show that family ownership leads to less aggressive earnings management practice in both types, accruals and real activities. The findings also show that dedicated and transient institutional investors have a significant role in restricting the real earnings management. However, the results indicate insignificant effects of managerial ownership and foreign ownership on real earnings management. Audit committee effectiveness is found to significantly moderate the relationship between family, managerial and transient institutional ownership with real earnings management, whereas it only moderates the relationship between dedicated institutional and foreign ownership with accruals earnings management. Based on the findings, this study contributes to better understanding of the ownership structure and earnings management practices among Malaysian listed firms. The results suggest that firms should improve the effectiveness of audit committees to enhance their financial reporting quality. Overall, this study provides a reference point for the relevant parties such as regulatory bodies, policymakers and standard setters towards improving the quality of earnings and corporate governance practices in ensuring credible accounting information.
format Thesis
author Al-Duais, Shaker Dahan Ahmed
author_facet Al-Duais, Shaker Dahan Ahmed
author_sort Al-Duais, Shaker Dahan Ahmed
title The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia
title_short The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia
title_full The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia
title_fullStr The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia
title_full_unstemmed The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia
title_sort influence of audit committee effectiveness on the relationship between ownership structure and earnings management in malaysia
publishDate 2019
url https://etd.uum.edu.my/9473/1/depositpermission_s900301.pdf
https://etd.uum.edu.my/9473/2/s900301_01.pdf
https://etd.uum.edu.my/9473/3/s900301_references.docx
https://etd.uum.edu.my/9473/
_version_ 1735388998641123328
score 13.211869

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