Audit Committee Composition and Auditor Reporting: A Malaysian Case
2015
In the wake of corporate failures following economic crisis, the role of audit committees as corporate governance mechanism has become more important to regulators, the accounting profession and the business community. Thi s study is conducted to examine the relationship between the composition of financially distressed firm's audit committees and the likelihood of receiving going-concern report in Malaysian context by examining published information for the year 2002.Consis tent with Carcello and Neal (2000), this study found an inverse relationship between percentage of affiliated directors on audit committee and the likelihood of receiving modified going concern report, however the relation exist is not significant. Therefore, t he study document evidences that the likelihood of receiving a going concern report for financially distressed firms (PN4 companies) in Malaysia is not significantly affected by the audit committee composition.
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