Earnings quality, board attributes and the requirement of Islamic corporate governance: evidence from Shariah-compliant companies in Malaysia / Rizwana Md Yusof

This thesis examines the relation between Earnings Quality and Board characteristics of Shariah-compYiant securities companies in Malaysia. The study integrates Shariah Principle as additional layer of regulation to examine the importance of having Shariah Supervisory Board in these companies. Three empirical studies were undertaken and the findings was triangulated to provide more comprehensive picture of the results. First, accruals quality models (Jones, 1991; Modified Jones, 1995) have been examined and reviewed in the new dataset; and Modified Jones model has been identified as the model that could accurately measure the quality of earnings reported. Second, the level of EQ has been examined from year 2003 to year 2012. The multivariate analysis revealed that independent director, financial and competency; and director with Shariah background influenced the level of EQ. The composition of the board members is revealed to have influence over the quality of Shariah decisions issued by the board. Moreover, the integrity of the board members, such as their ethical value, reputation and scholarly background, was found to be important in influencing its accountability and independence.