Audit Committee Characteristics and Timeliness of Financial Reporting: Social Enterprises Evidence

Abstract

There was vast research on the effectiveness of audit committees as part of the mechanisms in safeguarding shareholders’ interest and also ensuring effective financial reporting by companies. However, studies on the efficacy of audit committees as governance tools in a niche area relating to social enterprises namely cooperative societies in Malaysia is still scarce. Hence, this study intends to investigate the association between audit committee attributes namely audit committee expertise and experience, audit committee meeting frequency and audit committee size to the timeliness reporting compliance among Malaysian cooperative societies. Using qualitative research methods, 158 usable questionnaires from 59 cooperative societies were successfully gathered and analysed using SmartPLS 3 Version 3.2.8. The results obtained provided support to the notion that there is a significant positive relationship between the frequency of meetings on the timeliness reporting compliance and a significant positive relationship between audit committee size on the timeliness reporting compliance. However, the notion expecting a significant positive relationship between the expertise of the audit committee on the timeliness reporting compliance proved to be insignificant. Conclusively, the study provides theoretical and practical support to both literature and practitioners on the importance of having optimum audit committee size and high frequency of meeting in ensuring the timeliness compliance of financial reporting of cooperative societies.

Impact of Sharing Auditors with Related Party on the Time-liness of Financial Report

“…Research on the influencing factors of the timeliness of financial reporting is mainly from the perspective of firms' internal governance and external factors. Scholars have find that company size, profitability, ownership structure, internal control board characteristics and executives characteristics affect the timeliness of financial reporting [14][15][16][17][18]. Median exposure, audit quality, social responsibility and auditor locality also influence the timeliness of financial reporting [19][20][21].…”

Board Member with Political Connections, Audit Committee Expertise, Competent Management Team and Timeliness of Financial Reporting: Malaysia Non-Profit Organization Evidence

“…Quality Financial Reporting must adhere to timelines; in other words, financial information must be available when users need it to make decisions (Jusoh et al, 2022). The Societies Act 1966, Section 14 states that every registered Societies must submit a Financial Report within 60 days after the end of the accounting period.…”

“…According to Saad et al (2017), if a foundation or an organization can comply with the specified rules, then the result or the level of public trust to obtain sponsorships, zakat, and donations will be greater. According to previous studies (Jusoh et al, 2022;Marzuki et al, 2019;Zandi & Abdullah, 2019) involving public listed companies and cooperatives, business entities that adhere to timelines tend to earn a high level of confidence and trust among investors and shareholders. In addition, these studies also stated that quality Financial Reporting can attract more potential investors to invest in companies and cooperatives.…”

“…The cases mentioned above not only affect the public trust to donate but also raise the question of whether such malpractice can be detected by the management and auditors in order to show 'red flags' to the scandals taking place. DeZoort et al (2002) stated that if an organization has audit committee expertise (AC), then cases related to embezzlement, fraud, and abuse can be reduced; this opinion is also supported by many studies (Jusoh et al, 2022;Marzuki et al, 2019;Sun et al, 2014). Similarly, Loufrani-Fedida & Aldebert (2021) stated that by having an organization that has competent management, problems involving integrity and governance can be reduced efficiently.…”

Green Financing and Sustainable Policy for Low Carbon and Energy Saving Initiatives: Turning Educational Institutes of China into Green

“…As the Chinese government is trying to create a sustainable environment and reduce emissions, carbon assets transaction is another move towards this goal. Carbon trading is the purchase and sale of credits that allow a business or other organization to emit a specific amount of carbon dioxide or other greenhouse gases (Mat Jusoh et al, 2022). Governments have approved the carbon trade and credits to gradually reduce overall carbon emissions and lessen their impact on climate change.…”