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This study aims to examine the institutional investors’ preferences for internal governance mechanisms (internal audit function and audit committee effectiveness) in an emerging country like Malaysia.

A sample of 2,020 yearly firm observations in Bursa Malaysia over the period 2009-2012 is used. The two-stage least squares using instrumental variables (IV-2SLS) analysis is used to examine the relationships. To corroborate the findings of this study, a regression based on a one-year lag of the independent variables is used. Furthermore, ordinary least square regression and Generalized Method of Moments using instrumental variables (IV-GMM) are used.

Positive associations are found between the internal audit function and audit committee effectiveness and the institutional ownership.

These findings imply that institutional investors gravitate to firms that have high investment in internal audit function and effective audit committee. These findings are consistent with the conjecture that institutional investors try to minimize monitoring and exit costs and meet their fiduciary responsibility by investing in better internal audit firms.

This study offers insights to policymakers interested in enhancing internal governance mechanisms to attract institutional investors.

Limited empirical studies have examined the relation between internal governance mechanisms (internal audit function and audit committee effectiveness) and institutional ownership. This study adds to the existing literature on the importance of internal governance mechanisms by documenting an association between internal audit function and audit committee effectiveness and institutional ownership in an emerging country like Malaysia.

This study aims to investigate the correlation between four major indicators of auditor quality: audit fees, auditor size, non-audit services, auditor tenure, financial reporting timeliness and publicly traded firms in the United Arab Emirates (UAE).

Total report latency (TRL) is a metric used to assess the efficiency of financial reporting. It depicts the number of days between a firm’s fiscal year-end and the date on which its annual reports are made available on the capital market website. A total of 312 observations were identified from data collected over six years (2011–2016) from non-financial companies listed on UAE capital markets, such as the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM). The statistical methods that were implemented included descriptive statistics and multiple regressions.

The UAE data revealed that audit fees, leverage and profitability affect ARL. Nevertheless, there is a lack of empirical evidence to substantiate the impact of audit firm size, non-audit services or auditor tenure on TRL.

Based on the results, TRL is significantly reduced by audit fees alone. The substantial effort exerted by auditors to complete audit work on time, particularly when high audit fees are paid, may account for this outcome. Despite this, the scale of the audit firm, non-audit services and audit tenure could not further reduce the TRL.

The UAE capital markets are relatively recent developments. Thus, corporations might adopt a more lax approach to enforcing regulatory obligations. Local and international investors require timely audited financial statements to facilitate decision-making and dispel speculation. Determining audit quality attributes that decrease TRL is advantageous for UAE markets, investors and publicly traded companies.