Economics at your fingertips  

Accounting expertise in the audit committee and earnings management

Mujeeb Saif Mohsen Al-Absy, Ku Nor Izah Ku Ismail and Sitraselvi Chandren

Business and Economic Horizons (BEH), 2018, vol. 14, issue 3, 451-476

Abstract: This study attempts to investigate the influence of accounting expertise in the AC on the level of accrual earnings management (AEM) in Malaysian firms by using two proxies, the Modified Jones Models by Dechow et al. (1995) and Kasznik (1999). A sample of 143 firms with slight positive earnings were selected from the Bursa Malaysia Main Market for 2013, 2014 and 2015. Using panel data regression, this study shows that accounting expertise in the AC does not mitigate AEM. The accounting expertise of the AC directors and chairman and the AC’s balanced accounting expertise have a positive relationship with attitude for AEM. In line with prior studies, this paper concludes that AC directors are either not truly independent or do not have time or energy to mitigate earnings management practices. Thus, more policies are needed to strengthen the independence of the AC and ensure the members carry out their duties more responsibly.

Keywords: Audit committee; audit committee chairman; accounting expertise; accrual earnings management; Malaysia (search for similar items in EconPapers)
JEL-codes: G34 G38 M42 M48 M41 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) ... audit_pp.451-476.pdf (application/pdf) ... mber=32&article=2516 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Business and Economic Horizons (BEH) is currently edited by Orifjan Namozov, Ph.D.

More articles in Business and Economic Horizons (BEH) from Prague Development Center Contact information at EDIRC.
Bibliographic data for series maintained by Jaroslav Holecek ().

Page updated 2018-09-29
Handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:3:p:451-476