Factors associated with financial restatements: evidence from Malaysia
This study examines seven factors associated with financial restatements in Malaysian publicly listed companies (PLCs). We hypothesize that two factors proxy for management rationalization, two for management motives and three for the opportunity to predict financial restatements. Our sample cons...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2015
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| Online Access: | http://journalarticle.ukm.my/9524/1/11143-30909-1-PB.pdf http://journalarticle.ukm.my/9524/ http://ejournal.ukm.my/pengurusan/issue/view/700 |
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| Summary: | This study examines seven factors associated with financial restatements in Malaysian publicly
listed companies (PLCs). We hypothesize that two factors proxy for management rationalization,
two for management motives and three for the opportunity to predict financial restatements. Our
sample consists of 85 restatement firms and 85 no-restatement firms, listed on the Bursa
Malaysia and have a complete set of data from 2005-2011. The objective of this study is to
examine how rationalization, motive and weak governance lead to financial restatements in
emerging economies, like Malaysia. With regard to rationalization, we find that founders are
negatively and significantly associated with financial restatements while related party
transactions (RPTs) are positively and significantly associated. Additionally, we find evidence
that opportunity for restatement proxied by audit quality is negatively and significantly
associated with financial restatements. |
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