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dc.contributor.authorAbdul Wahab, Effiezal Aswadi
dc.contributor.authorMadah, M.
dc.contributor.authorHaron, H.
dc.identifier.citationAbdul Wahab, E.A. and Madah, M. and Haron, H. 2016. Corporate Governance and Earnings Conservatism in Malaysia. Accounting Research Journal. 29 (4): pp. 391-412.

Purpose: This paper aims to investigate whether the revised Malaysian Code on Corporate Governance in 2007 enhances earnings conservatism. In addition, the authors examine the relationship between board of directors’ expertise and conservatism. The third objective is to investigate the relationship between audit committee characteristics and earnings conservatism. Design/methodology/approach: The sample of this study is based on 3,183 firm-year observations for a period of 2004-2009. The authors hand collected the corporate governance variables, whereas the remaining data were extracted from Compustat Global. The authors used two measures of conservatism. The first is the market-based model by Basu’s (1997), and the second measure is the accrual-based measure by Ball and Shivakumar (2005). Findings: The authors find that the revision of Malaysian Code on Corporate Governance 2007 results in improving earnings conservatism. The authors find two audit committee characteristics, namely, audit committee financial expertise and independence increase earnings conservatism, after 2007. However, the authors could not find support whether board financial expertise mix affect conservatism. Research limitations/implications: This study did not consider other possible corporate governance variables that could influence earnings conservatism, as it would be a difficult task to gather them. Originality/value: The authors provide evidence on the role of corporate governance and earnings conservatism in Malaysia.

dc.titleCorporate Governance and Earnings Conservatism in Malaysia
dc.typeJournal Article
dcterms.source.titleAccounting Research Journal
curtin.departmentSchool of Accounting
curtin.accessStatusOpen access

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