An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)

In the past years, regulators and the business communities had expressed worries about the alarming rate at which firms or corporations collapse due to the mismanagement and manipulation of resources as seen in the cases of Enron, WorldCom in the United States of America; and to be specific in Malay...

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Main Authors:	Teh, Boon Heng, Ong, Tze San, Adedeji Babatunji Samuel, Ng, Sin Huei
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2016
Online Access:	http://journalarticle.ukm.my/10809/ http://journalarticle.ukm.my/10809/ http://journalarticle.ukm.my/10809/1/11553-48411-1-PB.pdf

id	ukm-10809
recordtype	eprints
spelling	ukm-108092017-10-11T07:41:25Z http://journalarticle.ukm.my/10809/ An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs) Teh, Boon Heng Ong, Tze San Adedeji Babatunji Samuel, Ng, Sin Huei In the past years, regulators and the business communities had expressed worries about the alarming rate at which firms or corporations collapse due to the mismanagement and manipulation of resources as seen in the cases of Enron, WorldCom in the United States of America; and to be specific in Malaysia, the cases of Megan Media Holdings Berhad and Transmile Group. Auditor switching is evident and the disorder of auditor switching often takes place in Malaysia; however, as time goes by, it is decreasing. Thus, this paper seeks to empirically examine the effect of auditor switching and corporate governance on financial performance of Malaysian PLCs. Secondary data on a total number of 100 PLCs from years 2009 to 2013 are used. The results reveal that the effect of auditor switching on performance does not vary with duality role and the board size. However, the independent director does not cause a good firm performance. Nonetheless, auditors do not have a direct effect on financial performance since they are not directly involved with the management of the firms which negates the results of previous study. Therefore, this paper has vital impact in that regulators and the public need to be educated through awareness campaigns to emphasize on the auditors’ roles as agents in understanding the impact of the association between corporate governance and financial performance. Furthermore, auditor switching should embrace not only rotation of audit partners, but rotation of audit firms as well in view that this will help in infusing discipline from the top to the bottom of the audit firms and the companies. Penerbit Universiti Kebangsaan Malaysia 2016 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/10809/1/11553-48411-1-PB.pdf Teh, Boon Heng and Ong, Tze San and Adedeji Babatunji Samuel, and Ng, Sin Huei (2016) An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs). Jurnal Pengurusan, 47 . pp. 43-53. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/856
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	In the past years, regulators and the business communities had expressed worries about the alarming rate at which firms or corporations collapse due to the mismanagement and manipulation of resources as seen in the cases of Enron, WorldCom in the United States of America; and to be specific in Malaysia, the cases of Megan Media Holdings Berhad and Transmile Group. Auditor switching is evident and the disorder of auditor switching often takes place in Malaysia; however, as time goes by, it is decreasing. Thus, this paper seeks to empirically examine the effect of auditor switching and corporate governance on financial performance of Malaysian PLCs. Secondary data on a total number of 100 PLCs from years 2009 to 2013 are used. The results reveal that the effect of auditor switching on performance does not vary with duality role and the board size. However, the independent director does not cause a good firm performance. Nonetheless, auditors do not have a direct effect on financial performance since they are not directly involved with the management of the firms which negates the results of previous study. Therefore, this paper has vital impact in that regulators and the public need to be educated through awareness campaigns to emphasize on the auditors’ roles as agents in understanding the impact of the association between corporate governance and financial performance. Furthermore, auditor switching should embrace not only rotation of audit partners, but rotation of audit firms as well in view that this will help in infusing discipline from the top to the bottom of the audit firms and the companies.
format	Article
author	Teh, Boon Heng Ong, Tze San Adedeji Babatunji Samuel, Ng, Sin Huei
spellingShingle	Teh, Boon Heng Ong, Tze San Adedeji Babatunji Samuel, Ng, Sin Huei An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)
author_facet	Teh, Boon Heng Ong, Tze San Adedeji Babatunji Samuel, Ng, Sin Huei
author_sort	Teh, Boon Heng
title	An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)
title_short	An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)
title_full	An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)
title_fullStr	An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)
title_full_unstemmed	An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)
title_sort	empirical study of auditors switching, corporate governance and financial performances of malaysian public listed companies (plcs)
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2016
url	http://journalarticle.ukm.my/10809/ http://journalarticle.ukm.my/10809/ http://journalarticle.ukm.my/10809/1/11553-48411-1-PB.pdf
first_indexed	2023-09-18T19:58:29Z
last_indexed	2023-09-18T19:58:29Z
_version_	1777406689559969792

An empirical study of auditors switching, corporate governance and financial performances of Malaysian Public Listed Companies (PLCs)

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