Abstract
This study investigates 4 factors associated with fraudulent financial reporting (FFR) in Malaysian public listed companies (PLCs). We hypothesize that the auditor-provided non-audit services (NAS), audit opinion, the composition of bumiputra directors on board and affiliated directors
are associated with FFR. Our sample consists of 41 fraud firms convicted of securities fraud and 41 no-fraud firms, all of which are listed on Bursa Malaysia and have a complete set of financial reporting data from 1999-2009. Our study reveals that joint provision of audit and NAS is
significantly positively associated with FFR. With regard to audit opinion, we find that companies whom received other than standard unqualified audit opinion prior to a fraud year have a positive association with FFR. This study also reveals that the proportion of affiliated directors on
the board has significant negatively relation to FFR. Surprisingly, our study shows a significant positive association between the composition of bumiputra directors on the board and FFR.