Pertanika J. Soc. Sci. & Hum. 23 (3): 603 - 622 (2015)
ISSN: 0128-7702 © Universiti Putra Malaysia Press
SOCIAL SCIENCES & HUMANITIES
Journal homepage: http://www.pertanika.upm.edu.my/
Article history:
Received: 26 August 2013
Accepted: 5 March 2015
ARTICLE INFO
E-mail addresses:
azrulihsan@gmail.com (Asmuni, A. I. H.)
anuar217@salam.uitm.edu.my (Nawawi, A.)
ahmad577@perak.uitm.edu.my (Salin, A. S. A. P.)
* Corresponding author
Ownership Structure and Auditor’s Ethnicity of Malaysian
Public Listed Companies
Asmuni, A. I. H.
1
, Nawawi, A.
1
and Salin, A. S. A. P.
2
*
1
Faculty of Accountancy, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia
2
Faculty of Accountancy, Universiti Teknologi MARA, Kampus Seri Iskandar,
32610 Bandar Baru Seri Iskandar, Perak, Malaysia
ABSTRACT
This study investigates the relationship between the ownership structure of Malaysian
public-listed companies and the choice of auditor based on ethnicity. In addition, the study
compares results for the years 2006, 2007 and 2008. The years were chosen as the Malaysian
Code of Corporate Governance (MCCG) was revised in 2007. This enabled comparison to
be made in the pre, during and post revision periods of the Malaysian Code of Corporate
Governance. The data were derived from a sample size of 300 companies listed on Bursa
Malaysia for three years i.e. 2006, 2007 and 2008. As such, it is possible to observe any
impacts of the changes in the revised MCCG on ownership structure and auditor’s ethnicity.
Multinomial logistic regression was employed to analyse the relationship as the data levels
support its use. It is found that in general MCCG 2007 inluences the selection of auditor’s
ethnicity by companies. Future research is recommended to study the reasons and rationale
of this result by employing other research strategies such as qualitative techniques and
increasing the sample size to get more generalisable indings.
Keywords: Corporate governance, ethnicity, audit, Malaysian Code of Corporate Governance, Malaysia
INTRODUCTION
Even though a lot of research has been
done in the area of corporate governance,
not much research has been conducted on
the Malaysian market especially focusing
on dissecting the Malaysian corporate
governance mechanism and its effects
on the choice of auditor’s ethnicity. The
environment of the Malaysian market is