Audit Committee Characteristics, Risk Management Committee and Financial Restatements

The purpose of this study is to examine the relationships between audit committee characteristics and risk management committee towards financial restatement practices among Malaysian listed firms. The results show that risk management committee and knowledge of audit committee have significant positive relationships with financial restatement. These characteristics are suggested to provide a means to the authorities in designing and enhancing a good corporate governance structure regarding the appropriate choices about audit committee attributes and as to improve companies' performance. However, the results also suggested members who have knowledge on accounting and finance are likely to be involved in restatement practices. It also appears that the existence of risk management committee may not have a role in assisting board to mitigate the occurrence of such practices. The results suggest that the audit committee characteristic and risk management committee provide less benefit than what is anticipated by regulators and policymakers in preventing financial restatement.