The Effects of Financial Restatement and Corporate Governance Mechanisms on Firm Value
Suhaily Hasnan1, Norazzie Md Zin2, Alfiatul Rohmah Mohamed Hussain3
1Suhaily Hasnan, Faculty of Accountancy, Universiti Teknologi MARA, Shah Alam (UiTM), Malaysia.
2Norazzie Md Zin, Faculty of Accountancy, UiTM, Shah Alam, Malaysia.
3Alfiatul Rohmah Mohamed Hussain, Faculty of Accountancy, UiTM, Shah Alam, Malaysia.
Manuscript received on 27 September 2019 | Revised Manuscript received on 09 November 2019 | Manuscript Published on 22 November 2019 | PP: 513-523 | Volume-8 Issue-6S3 September 2019 | Retrieval Number: F10940986S319/19©BEIESP | DOI: 10.35940/ijeat.F1094.0986S319
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: This study examines the relationship between financial restatement and firm value in Malaysian public listed firms. In addition, it assesses the moderating effects provided by corporate governance mechanisms on the relationship of financial restatements and firm value. The study covers the period 2009-2015 and involves 142 public listed companies in Bursa Malaysia with financial restatements. The findings reveal that financial restatements do adversely impact firm value and that financial restatements negatively and significantly affect firm value. In terms of moderating variables, we find that the interaction between financial restatement and family ownership is negatively associated with firm value. In addition, this study also finds that the interaction between financial restatement and institutional ownership is positively and significantly associated with firm value. In conclusion, in the Malaysian context, this study establishes that financial restatement has a negative impact on firm value.
Keywords: Corporate Governance, Firm Value, Restatement.
Scope of the Article: e-governance