Chief Executive Officer Characteristics and Financial Restatements in Malaysia

Abstract

The purpose of this paper is to investigate whether the Chief Executive Officer (CEO) characteristics affect the occurrence of financial restatements in Malaysian firms. The CEO characteristics used in this study were tenure, honorific title, gender, expertise, and age. In addition, the financial restatement has been measured as a dummy variable as to whether companies restate their financial statements or not. The sample of this study comprised 442 companies listed in the main market of Bursa Malaysia during the period 2012–2016. The panel data method was utilised to analyse the data. This study employed a logistic regression analysis. The results of this study revealed that there is a positive and significant relationship between CEO tenure and CEO gender with financial restatements. In addition, this study found a negative and significant relationship between CEO honorific title and financial restatements. However, the results found insignificant relationships between CEO expertise and age with financial restatements. This study highlighted the importance of considering CEO characteristics as one of the influential determinants of financial restatements in Malaysian companies.

Board Characteristic and Financial Restatement

“…The BoD is responsible for the high-quality financial reports to stakeholders (Brochet & Srinivasan, 2014;Omer et al, 2019). BoD size is considered to determine the quality of financial information submitted to the public (Altarawneh et al, 2020). The larger size is considered to have higher reporting quality (Hasnan et al, 2020).…”

“…Women have thoroughness and discipline, and they can maintain the work quality. A woman also tends to avoid risk, trying to minimize mistakes (Altarawneh et al, 2020). Therefore, at least one female director directs their group on process and control-oriented.…”

“…However, there is still debate regarding the relationship between the BoD characteristic and financial restatement. Therefore, there has been no conclusive conclusion on these empirical findings (Altarawneh et al, 2020). This study explores three characteristics of BoD, namely size, presence of a female, and overconfidence in a financial restatement.…”

Associations of Board Size, Audit Reputation, and Debt with Financial Restatement: Evidence in Vietnam

“…Particularly, the level of board independence or audit quality has an impact on the likelihood of a listed company's financial restatement (Hasnan, 2015). In addition, Marwan Altarawneh's (2020) research evaluated the CEO characteristics influencing the occurrence of financial restatement (Altarawneh et al, 2020); and Francis and Yu's (2013) thesis demonstrated that the audit quality from the Big 4 accounting firms can affect the financial restatement of listed companies as well (Francis, 2013). (Bhattacharya, 1979) In Vietnam, it is emphasized that Nguyen Van Huong's (2018) research can summarize these factors that may have an impact on the financial restatements of listed companies in Vietnam's stock market.…”

Kajian Empiris Financial Restatements Akibat Perubahan Standar Akuntansi Keuangan Di Indonesia

“…Selain itu, juga ada Riandi et al (2019) yang meneliti tentang hubungan penyajian kembali dengan nilai wajar, serta Siregar dan Rahayu (2018) yang melakukan penelitian pengaruh corporate governance terhadap restatement dan dampaknya terhadap harga saham. Masa jabatan dan gender dari CEO juga memiliki pengaruh signifikan terhadap penyajian kembali (Altarawneh et al, 2020).…”