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:	eng eng eng
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
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id	my-uum-etd.9473
record_format	uketd_dc
spelling	my-uum-etd.94732022-06-07T02:07:09Z The influence of audit committee effectiveness on the relationship between ownership structure and earnings management in Malaysia 2019 Al-Duais, Shaker Dahan Ahmed Malik, Mazrah Abdul Hamid, Mohamad Ali Tunku Puteri Intan Safinaz School of Accountancy (TISSA) Tunku Puteri Intan Safinaz School of Accountancy (TISSA) 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 https://etd.uum.edu.my/9473/ https://etd.uum.edu.my/9473/1/depositpermission_s900301.pdf text eng staffonly https://etd.uum.edu.my/9473/2/s900301_01.pdf text eng public https://etd.uum.edu.my/9473/3/s900301_references.docx text eng public other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng
advisor	Malik, Mazrah Abdul Hamid, Mohamad Ali
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
qualification_name	other
qualification_level	Doctorate
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
granting_institution	Universiti Utara Malaysia
granting_department	Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
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
_version_	1747828603236646912

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

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