AUDIT COMMITTEE EXPERTS AND MANDATORY DISCLOSURE TRANSPARENCY OF MALAYSIAN GOVERNMENT LINKED COMPANIES

Transparency has been acknowledged as one of the approaches which is more direct and observable to assess financial reporting quality. Underlying this is a belief that different areas of expertise enhance the effectiveness of audit committee and, by extension, the mandatory disclosure transparency. Hitherto, many studies did not specifically examine the composition of audit committee expertise in depth as they simply used working experience as a proxy to measure expertise. This study primarily investigates the association between audit committee experts and mandatory disclosure transparency of Malaysian GLCs. Three fundamental types of expertise examined in details are experience, advanced academic qualification and training. Regarding experience, it is further categorised into accounting financial experts, finance experts and supervisory experts. To achieve this objective, a quantitative-positivist approach has been employed in this study wherein the mandatory disclosure index has been developed and corporate reports of 10 GLCs for the period of 2009-2017 have been analysed. Using multiple regression analysis on data collected, the results show that accounting financial experts, finance experts, supervisory experts and advanced academic qualification have a significant positive influence on the mandatory disclosure transparency. However, there is no evidence that training affects mandatory disclosure transparency. This study is important as it provides additional knowledge about the impact of having audit committee experts in enhancing mandatory disclosure transparency. It offers an ample scope for further improvement for the Malaysian government and regulators to revise and incorporate this study's outputs into the current standards and policies. (C) 2020 Published by European Publisher.