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Societal Wellbeing Disclosure, Corporate Governance, andFinancial Reporting Quality: Evidence from Malaysia

Year: 2025

Type: article

Abstract: This study examines the relationship between societal well-being disclosure, governance mechanisms, and financial reporting quality (FRQ) ‎among Malaysian listed firms. Using 500 firm-year observations from 2018 to 2022, FRQ is measured using a modified Dechow and Dichev’s ‎accrual quality model. Regression analysis shows that female board representation is the only governance variable significantly associated with ‎improved FRQ. Other governance structures, including board size, independence, audit committee characteristics, leadership separation, and ‎meeting frequency, are not significant. Societal well-being disclosure also does not significantly influence FRQ, suggesting that sustainability ‎reporting remains largely symbolic in Malaysia. These findings extend agency and signaling theory by demonstrating that gender diversity ‎strengthened monitoring and reporting integrity, while also highlighting a gap in legitimacy and stakeholder theory, where societal well-being has ‎yet to influence financial reporting. Practically, the results imply that regulators should strengthen gender diversity initiatives and improve ‎substantive governance practices beyond structural compliance‎.

Source: International Journal of Accounting and Economics Studies

DOI: 10.14419/wtfn7b90

Authors: Nur Izzah Nasuha Mohd Zaim, Nor Asma Lode, Wan Adibah Wan Ismail

Institutions: Universiti Utara Malaysia, United Arab Emirates University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Gender equality

Open Access status: bronze

OpenAlex ID: W4415039201

FWCI:

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