Involvement of Board Chairmen in Audit Committees and Earnings Management: Evidence from Malaysia

• 발행기관: 한국유통과학회
• 저자명: Mujeeb Saif Mohsen AL-ABSY Ku Nor Izah Ku ISMAIL Sitraselvi CHANDREN Shehabaddin Abdullah A. AL-DUBAI
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.8, 233~246쪽, 전체 14쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.08.30

영문 초록

This paper investigates the effect of the involvement of the board chairman in the audit committee (AC) on earnings management (EM). It examines Bursa Malaysia-listed companies with the lowest positive earnings for the years 2013 to 2015. The Modified Jones Model by Kasznik (1999) was used to determine discretionary accruals. An AC that includes its board chairman as an ordinary member is associated with greater discretionary accruals. However;a board chairman who is also the chairman of the AC does not seem to influence discretionary accruals. This paper supports the agency theory and policy-makers’ efforts to prevent board chairmen from sitting on ACs. It is the first study that uses the agency theory to describe the association between the board chairman’s involvement in the both AC and EM. This study alerts policy-makers;stakeholders and researchers to the influence of a board chairman serving on the AC in curbing EM. Furthermore;it provides empirical evidence that the majority of Malaysian companies whose board chairmen are involved in the AC appoint the chairman as an ordinary member of the AC. This indicates that executive directors may affect such actions. Hence;more policies are needed to improve AC independence.

목차

1. Introduction

2. Literature Review

3. Audit Committee Independence and Hypotheses

4. Research Methodology

5. Results and Discussion

6. Robustness Tests

7. Conclusion

References

키워드

Board Chairman Audit Committee Accrual Earnings Management Real Earnings Management Malaysia