Following a sequence of financial crises around the world, a series of corporate
governance codes were issued concerning best practice with regard to corporate
governance reformation. Central to these codes was the aim of the government
to create investor confidence, to raise the standard, drive corporate governance
reforms and use as a benchmark monitoring and implementing as corporate
governance practices and policies at the corporate company level. The Malaysian
government is committed to ensure that corporate companies demonstrate a track
record of good governance in order to attract and retain long-term investors.
Therefore, after seven years, the first Malaysian Code on Corporate governance
(MCCG) was introduced in 2000, while the revised MCCG was introduced in 2007.
The amendments of MCCG 2000 involved the components of audit committees
and board of directors. It was aimed to improve the quality of audit committees
and board of director’s functions among Publicly Listed Companies (PLCs) in
promoting accountability and high levels of protection for the investor. This article
aims to examine the effect of the Malaysian Code on Corporate governance on
audit and accountability practices by comparing practices prior to, and after the
implementation of the Code. Furthermore, the relationship between changes in
audit and accountability practices and institutional performance in terms of
corporate governance reformation is also examined.