Investigating audit quality among Big 4 Malaysian firms

Tyrone M. Carlin*, Nigel Finch, Nur Hidayah Laili

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


Purpose – The purpose of this paper is to contemplate the degree to which technical expertise in Malaysian Big 4 auditing practice survives periods of material regulatory inflexion sufficiently to underpin quality financial reporting outcomes. Design/methodology/approach – The adoption of IAS in Malaysia in 2006 introduced a highly technical standard (financial reporting standards – FRS 136) which impacted not only preparers but also auditors of financial statements. This transition period represents a unique opportunity to interrogate the content of financial statements drawn up under new and complex standards, with a view to gaining insight into the quality of oversight offered by the audit profession. Findings – Contrary to the view within the extant literature that there is homogeneity in audit quality among Big 4 firms, this paper reports substantial cross-sectional variation among the sample of Big 4 Malaysian audit firms and reports on distinctly poor compliance levels. Research limitations/implications – The research focuses on compliance with various requirements under FRS 136 – Impairment of Assets among a sample of first-time adaptors drawn from the FTSE Bursa Malaysia Index whose 2006 financial accounts have been audited by a Big 4 auditor. Practical implications – The results raise questions about audit quality among the sample firms and the robustness of regulatory oversight institutions operating within Malaysia. Originality/value – This research illustrates a novel approach to examining the issue of audit quality by introducing a compliance quality approach focusing on note-form disclosures.

Original languageEnglish
Pages (from-to)96-114
Number of pages19
JournalAsian Review of Accounting
Issue number2
Publication statusPublished - 17 Jul 2009


  • Auditing
  • Auditing standards
  • Goodwill accounting
  • Malaysia
  • Professional standards


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