Audit committee and the amendments of quarterly financial reports among Malaysian companies

• Main Authors: Ku Ismail, Ku Nor Izah, Syed Abd Rahman, Sharifah Asmawati
• Format: Article
• Language: English
• Published: Universiti Kebangsaan Malaysia 2011
• Subjects: HF5601 Accounting
• Online Access: http://repo.uum.edu.my/17682/1/JP%2032%202011%20%203%20-%2012.pdf; http://repo.uum.edu.my/17682/; http://ejournals.ukm.my/pengurusan/article/view/233

This paper examines the association between audit committee characteristics (independence, expertise and activities) and the amendments of quarterly financial reports of Malaysian companies. Control variables, namely size of board of directors, size of company, profitability and auditor are also included in this study. In this study, each of the 63 sampled companies that amended their quarterly reports in 2005 is matched with a company that did not make any amendments.Results of the regression test indicate that companies having audit committees with two or more financial experts are less likely to amend their quarterly reports. Although other variables (except for auditor) appear to have a negative association with amendments, statistically the association is insignificant.This study also observed that most of the amendments are due to oversight, mathematical mistakes and typographical errors. The findings suggest that to be effective, audit committees should have more than one financial expert.