MASDOR, NORAZURA (2020) KEY AUDIT MATTERS, SHARE PRICE AND AUDIT QUALITY: EVIDENCE FROM MALAYSIAN COMPANIES. Masters thesis, Universiti Tenaga Nasional.
![[img]](https://repositori.mohe.gov.my/style/images/fileicons/text.png) |
Text
THESIS NORAZURA MASDOR LATTEST.pdf Restricted to Registered users only Download (2MB) |
Abstract
Audit reports have been considered as one of valued information to investors. However, value relevance of the audit reports is still an issue to many stakeholder. Auditing standard setters have attempted in many occasion, to improve quality communication between auditors and financial statement users. Recently, in order to meet the capital market demand for high- quality accounting information and improve the quality of audit reports of listed companies, the new audit standards have been introduced by adding key audit matters (KAMs) to the reports. The additional paragraphs are mainly about the risks of companies’ financial results. This improvement aims to reduce expectation gap between auditors and financial statement users. Malaysia, as a member of International Federation of Accountants (IFAC), has also adopted the new standards for financial statements issued after 31 December 2016. Therefore, the aim of this study is to investigate whether the KAMs in the new audit reports provided incremental information content to investors and whether this new enactment would improve audit quality. The study employs two dependent variables, share prices to urge investors’ responsiveness when the KAMs disclosed in audit reports and another variable is using reduction in absolute abnormal accruals to measure whether there is any improvement in audit quality when KAMs being introduced. For the first dependent variable, share prices cover two periods of analysis; share price at event date (audit report date), and average seven days after event date.s for second dependent variable, abnormal accruals using the modified Jones Model is used to represent audit quality. The independent variables for this study is key audit matters. The data set includes the financial and other related information in 2016 of 337 listed companies in the Bursa Malaysia as the representative of emerging markets. Multivariate regression model is performed. At the 0.05% of significant level, the results show that KAMs are providing incremental value to share prices. The analysis shows that KAMs has impact on share prices in all two periods. In other words, investors seem to pay attention to KAMs in making their decision. The study also finds that upon the adoption of the new audit reporting, there was an improvement in audit quality as proxies by a reduction in absolute abnormal accruals. The findings show that the newly enacted guidelines in Malaysia for adding KAMs disclosures in the audit report are not only significantly informative to the investors as the regulators expected yet significantly improve audit quality in Malaysia.
| Item Type: | Thesis (Masters) |
|---|---|
| Subjects: | Social Sciences > Commerce Social Sciences > Commerce > HF5601 Accounting Science > Mathematics |
| Depositing User: | ENCIK SAIFUL FADZLY JAMALUDIN |
| Date Deposited: | 25 Sep 2026 12:05 |
| Last Modified: | 25 Sep 2026 12:05 |
| URI: | https://repositori.mohe.gov.my/id/eprint/448 |
Actions (login required)
 |
View Item |