Navigating independence and excellence: how audit committee traits shape earnings quality in top sectors in Malaysia? / Razana Juhaida Johari, Norfadzilah Rashid and Norliana Mohd Kamil

Johari, Razana Juhaida and Rashid, Norfadzilah and Mohd Kamil, Norliana (2025) Navigating independence and excellence: how audit committee traits shape earnings quality in top sectors in Malaysia? / Razana Juhaida Johari, Norfadzilah Rashid and Norliana Mohd Kamil. Asia-Pacific Management Accounting Journal (APMAJ), 20 (1): 4. pp. 85-116. ISSN 2550-1631

Abstract

This study examines how audit committee characteristics influence earnings quality (EQ), focusing on the mediating role of audit quality (AQ). Using panel data from 2019 to 2021 and fixed and random effects regression models, the study analyzes variables such as audit committee independence (ACI), financial expertise (ACE), meeting frequency (ACM), leverage (LEV), and firm size. Results show that ACI and ACE negatively affect EQ, while leverage positively impacts it. Notably, AQ mediates these relationships, highlighting its crucial role in enhancing financial reporting. Interestingly, frequent audit committee meetings are linked to lower EQ, suggesting that meeting frequency should be strategically managed. The findings underscore the importance of a well-structured audit committee in improving audit and earnings quality, which is essential for strong corporate governance and financial crime prevention. While the research focuses on leading sectors in Malaysia, the insights have broader implications for improving financial transparency and investor confidence across various industries. The study emphasizes the need for balance in audit committee attributes and effective oversight to ensure reliable and transparent financial reporting.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Johari, Razana Juhaida
UNSPECIFIED
Rashid, Norfadzilah
nikmfadzilah@unisza. edu.my
Mohd Kamil, Norliana
UNSPECIFIED
Subjects: H Social Sciences > HF Commerce > Accounting. Bookkeeping > Auditing. Auditors > Audit committees
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Asia-Pacific Management Accounting Journal (APMAJ)
UiTM Journal Collections: UiTM Journals > Asia-Pacific Management Accounting Journal (APMAJ)
ISSN: 2550-1631
Volume: 20
Number: 1
Page Range: pp. 85-116
Keywords: Audit committee characteristics, earnings quality, audit quality, corporate governance
Date: April 2025
URI: https://ir.uitm.edu.my/id/eprint/115805
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