THE RELATIONSHIP BETWEEN AUDIT COMMITTEE EFFECTIVENESS AND THE LEVEL OF CORPORATE RISK DISCLOSURE: THE RELEVANCE OF PRE- AND POST-MCCG 2012
AbstractThis study examines the relation between audit committee effectiveness and the level of corporate risk disclosure amongst Malaysian listed companies pre- and post- of Malaysian Code of Corporate Governance 2012. Content analysis is employed in this study. A total of 122 firm-year observations were examined in order to measure the extent of risk disclosure against audit committee effectiveness. The findings reveal only audit committee size and diligence are significant in explaining the variations in the corporate risk disclosure for pre- and post-MCCG 2012. This indicates audit committee size does matter in assisting the revelation of the corporate risk disclosure. It also signifies the audit committee has taken up their responsibilities and discharging their duties accordingly by reference to a higher number of audit committee meetings. An unexpected result also obtained in this study whereby an inverse relationship is detected between audit committee independence and corporate risk disclosure. The result is contrary to the requirement of MCCG 2012 that emphasized on the importance of independent director under its Principle 3.5. Further, the result also shows that the audit committee effectiveness are increasing in the post-MCCG 2012 as compared to pre-MCCG 2012 in determining the extent of risk disclosure of the sample firms.
Apr 30, 2020
How to Cite
SAARI, Sarliza et al. THE RELATIONSHIP BETWEEN AUDIT COMMITTEE EFFECTIVENESS AND THE LEVEL OF CORPORATE RISK DISCLOSURE: THE RELEVANCE OF PRE- AND POST-MCCG 2012. Management & Accounting Review (MAR), [S.l.], v. 19, n. 1, p. 267-296, apr. 2020. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/1189>. Date accessed: 05 june 2020. doi: http://dx.doi.org/10.24191/mar.v19i1.1189.