Financial reporting quality following the corporate governance reforms: A conditional conservatism perspective
Publication Name
Journal of Governance and Regulation
Abstract
This study examines the quality of financial reporting during the period following the corporate governance reforms in Malaysia, as motivated by the importance of investors’ needs for high-quality financial reporting. Using the asymmetric timeliness of the earnings model, we analysed the sample of 6,819 firm-year observations of Malaysian listed companies from 2002 to 2011. The findings show evidence of the high quality of reporting following the corporate governance reforms. We found that firms have reported a more timely recognition of losses than gains in the post-reform period. Our results suggest that conditional conservatism has been prevalent during the period, and the results are robust even after conducting extensive specification tests. This study suggests that after the corporate governance reforms, Malaysian companies’ financial statements have been more reliable for investors in making investment decisions.
Open Access Status
This publication may be available as open access
Volume
10
Issue
2 Special issue
First Page
216
Last Page
225
Funding Number
027/2020
Funding Sponsor
Universiti Teknologi MARA