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The Malaysian corporate governance regime underwent significant enhancement through the revamp of the Bursa Malaysia Listing Requirements (BMLR) in 2008 in respect of audit committee characteristics in order to address adverse market perceptions of its relationship based economy with the strong presence of politically connected (PCON) firms. This study investigates whether such reforms have made a difference. We examine if PCON firms have higher audit fees post implementation of BMLR 2008 on audit committee characteristics. Using data from 945 firm-year observations for 2005 to 2009 we find that PCON firms have higher audit fees due to improved governance which demands an increase in audit effort. ISSN 1941-899X 2015 www.macrothink.org/jmr 531 Further, the association between audit committee independence, diligence, and expertise and audit fee is stronger post-2008, suggesting that PCON firms are committed to strong corporate governance and are prepared to pay a higher quality external audit work. Journal of Management Research

Globalization offers opportunities for workers to achieve higher levels of economic prosperity. Unfortunately, it also causes job insecurity for specific groups in certain sectors. This is particularly so in the Malaysian manufacturing sector which is actively fragmenting its production structure. There are prior concerns that some workers in certain labour-intensive segments of the production process will be displaced. The issue is whether the country's current social protection systems are adequate to protect the disadvantaged. The paper first addresses the effects of one perspective of fragmentation on relative labour demand in Malaysian manufacturing. Subsequently, the relevant legislations and schemes enacted and implemented to protect workers are examined. The key conclusions of the study are first, unskilled workers are more likely to lose out from the international fragmentation of imports; and second, the existing social protection systems are inadequate to meet the needs of the unskilled workers.

This research is conducted in the Malaysian corporate setting with the presence of favoured companies or politically connected companies (PCON). PCON companies are perceived by the market and external auditors to be riskier than non-politically connected companies. In addition, these companies generally exhibit poor corporate governance practices and face agency problems. However, the enforcement of tighter regulations and the greater emphasis on risk management and governance practices within the PCON companies further indicate the growing importance of having a strong audit committee and internal audit functions in fulfilling corporate governance responsibilities. With reference to the findings from the interviews with the regulators, external auditors and internal auditors, the audit committee and the head of internal auditors of PCON companies have been complying with the Bursa Malaysia Listing Requirements, which were revised in 2008. This observation strengthens claims that the corporate governance regulatory framework has indeed been effective. The involvement of the audit committee and internal audit functions in strengthening internal controls demand higher audit quality from the external auditors, and, hence, higher audit fees.

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