Open AccessThe associations of board of directors’ characteristics with modified audit opinion
Author(s) -
Waddah Kamal Hassan Omer,
Khaled Salmen Aljaaidi,
Mohd ‘Atef Yusof,
Mohamad Hisyam Selamat
Publication year - 2020
Publication title -
ad-minister
Language(s) - English
Resource type - Journals
eISSN - 2256-4322
pISSN - 1692-0279
DOI - 10.17230/ad-minister.37.1
Subject(s) - accounting , corporate governance , business , audit committee , audit , auditor's report , logistic regression , listing (finance) , test (biology) , quality (philosophy) , chief audit executive , joint audit , internal audit , finance , medicine , paleontology , philosophy , epistemology , biology
The aim of this study is to investigate the association between the characteristics of the board of directors and the likelihood that a company receives a modified audit opinion (as a measure of the quality of companies external financial reporting) in Malaysia. To test our hypotheses, we use the pooled cross-sectional logistic regression analysis for 136 firm-year observations listed on Bursa Malaysia over the period 2009-2011.The evidence we uncover is consistent with the hypotheses that companies with large board size and greater financial expertise of the board of directors are less possible to receive a modified audit opinion. The evidence offers by this study reinforces the listing rules of the Malaysian-Corporate-Governance Code and the requirements of the Bursa Malaysia Corporate-Governance-Guide, which consider the significance of the board of directors as an aspect of good corporate governance to its critical role in the Malaysian financial reporting process.