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The purpose of this paper is to provide an extension of the Corporate Governance Reporting Initiative (CGI) 2004, which reports on Malaysia's first corporate governance ratings. Characteristics of firms with high and low scores in the corporate governance ratings are analysed by comparing companies based on their corporate governance ranking as reported in the CGI.

Firms are classified into those at the top 50 percent and the bottom 50 percent of the corporate governance ratings list to examine whether there are any differences in the characteristics of firms in both classified samples. The characteristics of firms that are being examined are firms' profitability, leverage, growth, market valuation, size, age, ownership structure and countries of operation based on the Logit analysis.

The result shows that firm size has a strong influence with corporate governance ratings, but not so for other variables tested.

This study analyses only eight corporate characteristics. There are other measures that can represent firms' size such as market capitalization.

It is hoped that the traits found from the analysis will be able to provide additional information concerning corporate governance to interested parties. The characteristics revealed may probably be found to be essential elements in the development of effective and efficient corporate governance structure. The study could also help corporations in their short‐ and long‐term strategies.

This study bridges the gap of previous studies by using a complete set of governance standards on the analysis and directly identifies firms with certain scores of corporate governance and addresses issues related to these exceptional companies.

This paper aims to investigate the relationship between corporate tax avoidance and environmental, social and governance (ESG) performance and the moderating effect of financial constraints on the relationship between corporate tax avoidance and ESG performance.

The sample consists of a global data set involving 24,259 firm-year observations from 49 countries for the years 2011–2020. Corporate ESG performance was extracted from the Thomson Reuters database. The book-tax difference model was used for measuring corporate tax avoidance, while financially constrained firms were identified using the Kaplan and Zingales (1997) index.

The results show that firms with higher tax avoidance are associated with higher ESG performance, but lower ESG performance is shown for firms with higher financial constraints. The results further indicate that the positive impact of corporate tax avoidance on ESG performance becomes weaker for firms with higher financial constraints.

The findings imply that policymakers and regulators should focus on mechanisms to promote more internal funds to assist firms in pursuing ESG-related initiatives, such as through tax incentives. Investors should understand the “smokescreen” effect of corporate tax avoidance on ESG performance, especially for firms with financial constraints.

This analysis provides international evidence on the link between tax avoidance and ESG and considers the joint effect of pressures for internal funds, through tax and financing constraints, on corporate ESG performance.

This study aims to examine the nonlinear effects of board size and board independence on the corporate sustainability performance of listed firms worldwide.

This study uses the global environmental, social and governance (ESG) dataset from the Thomson Reuters database, which includes a sample of 23,766 firm-year observations from 33 countries from 2011 to 2022.

The results indicate that board size and independence have positive impacts on corporate sustainability performance; however, these relationships are nonlinear. The authors find an inverted U-shaped relationship for board size. After the optimal point, the positive relationship between board size and corporate sustainability performance becomes negative. Board independence, however, has a positive exponential relationship in which the positive effect increases exponentially after the optimal point. The results are robust to a battery of tests, including alternative measures for corporate sustainability performance, board independence and different estimation procedures.

This study illustrates empirical evidence on the nonlinear effect of board size and board independence on corporate sustainability performance, which explains the mixed evidence involving board size and independence in corporate sustainability literature and offers a complementary research approach in the literature on board dynamics.

This study has practical implications for investors aiming for sustainable and ethical investment choices, as they should be mindful of matters relating to board composition, particularly the appointment of independent directors and ideal board size.

Extensive empirical evidence has examined the relationship between corporate governance variables and corporate sustainability performance. This study introduces the effect of the nonlinear relationship between board size and board independence on corporate sustainability performance using international evidence.

The Islamic bond, known as sukuk, is an ethical financing avenue driven by religious and profit motives. This study aims to analyze the relation between related party transactions and Sukuk. Companies with high related parties transactions are deemed to be committed toward social capital that they are more likely to choose sukuk for their debt financing.

Logistic regression analyses were conducted using data from 122 listed companies in Malaysia. Related party transactions proxy for companies’ commitment to social capital, while the likelihood to choose sukuk represents ethical financing.

This study documents a positive relationship between related party borrowings and sukuk, suggesting that close ties through related parties have created an ethical sense that is associated with the uptake of sukuk.

Future research can opt other measures of related party transactions, such as by identifying the different categories of transactions and related parties. Future research may also extend the sample size by using samples from several countries to enable analysis involving institutional environment variables of the countries.

Findings of this study highlight sukuk uniqueness by supporting its role as ethical financing avenue through commitment toward social capital.

This study is the first to use the social capital perspective of related party transactions in identifying ethical financing choice that the authors believe is relevant in the institutional context of developing Muslim countries.

This paper investigates whether board gender diversity and the strength of auditing and reporting standards are associated with analysts' forecast accuracy and whether the strength of auditing and reporting standards moderates the association between board gender diversity and analysts' forecast accuracy.

The sample covers 24,086 firm-year observations from 37 countries from 2009 to 2018. The data were obtained from various sources: earnings forecast data from the Institutional Brokers' Estimate System (IBES) database; board gender diversity and financial data from Thomson Reuters Fundamentals; and country-level data from World Economic Forum database. The authors measure board gender diversity using four proxies namely, the proportion of women directors on the board, a dummy variable for board with at least one women director, BLAU measurement corresponds to the proportion of group females and males using the formula adopted from the Hirschman-Herfindahl index (Hirschman, 1964) and the proportion of the number of women executives over the total number of directors. The study also uses a series of specification tests using alternative measures for each variable and controlling the global financial crisis and endogeneity issue.

Firms with higher board gender diversity have higher analysts' forecast accuracy. Compared to countries with weak auditing and reporting standards, the authors find firms in countries with strong auditing and reporting standards have more accurate forecasts. Further, the positive relationship between the board gender diversity and analysts' forecast accuracy is weaker for firms in countries with strong auditing and reporting standards, as compared to firms in countries with weak auditing and reporting standards.

This study found new evidence on the effect of women directorships on analyst forecasts and this relationship varies between levels of the strength of auditing and reporting standards, which was not addressed in prior studies.

This study highlights the importance of strengthening the policy on getting more women on board and the continuous efforts to enhance the strength of auditing and reporting standards of a country as valuable strategies to enhance the quality of analyst forecasts.

This is the first study that employs the international dataset to examine the moderating effect of the strength of auditing and reporting standards on the relationship between board gender diversity and analysts' forecast accuracy.

This study aims to examine the roles of perceived organisational support (POS), attitude and self-efficacy in understanding the external whistleblowing intentions among senior auditors through the lens of stimulus–organism–response theory.

This study uses data from 119 senior auditors in audit firms in Malaysia. POS is predicted to be a stimulus factor from the external environment that affects the attitude and self-efficacy (organism) of the auditors and reassures them to act to whistleblow (response).

POS has a significant impact on self-efficacy and on attitude. Self-efficacy is shown as a significant mediator between POS and external whistleblowing intentions, but there is no statistical support for self-efficacy having a mediating effect on the relationship between the attitude of senior auditors and external whistleblowing intentions.

The findings can assist accounting professional bodies in understanding the psychological behaviours of auditors that contribute to their intention to shine a light on wrongdoing in audit firms and in providing a better insight into the critical factors that could influence auditors to whistleblow.

This study is among the earliest to investigate the application of stimulus–organism–response theory in whistleblowing, and hence it illustrates how the theory can be applied in studies on the ethical behaviours of actors in professional careers. The findings shed light on the role of self-efficacy as a significant mediator between POS and external whistleblowing intentions.

Despite various regulatory frameworks to combat unethical conduct, fraud and corruption remain alarmingly high. While whistleblowing is an important mechanism to identify and prevent unethical conduct, there is a lack of empirical studies on this issue in the Malaysian context, especially whistleblowing within the audit firms. Therefore, the purpose of this paper is to examine the whistleblowing intention of external auditors in Malaysia and the factors influencing this intention.

Data were collected using a structured questionnaire that was sent by post to external auditors throughout Malaysia. Participants were selected using a convenience non-probability sampling technique. A total of 274 responses were analyzed. SmartPLS version 3.2.8 was used for the analysis.

Professional commitment and independence commitment had a positive influence on whistleblowing intention, supporting the argument that professional factors can increase the intention of the external auditors to whistleblow. Perceived behavioural control had a positive relationship with whistleblowing intention, while there is no evidence to indicate that attitude and subjective norms influence whistleblowing intention.

This study explored whistleblowing among external auditors in Malaysia by focussing on the professional factors of professional commitment and independence commitment, which were hypothesized to be key factors in intention to whistleblow. These factors were incorporated with a multi-component of attitude, subjective norms and perceived behavioural control, which were derived from the theory of planned behaviour. The findings have implications for the auditing profession because they provide a better understanding of the factors that influence the whistleblowing intention of external auditors.

This study aims to investigate the association between corporate risk-taking and cash holdings, and whether financial constraints moderate this association.

Regression analyses were applied to 606 firm-year observations from Saudi Arabia from 2011 to 2020.

Firms with higher risk-taking exhibit higher cash holdings, whereas financially constrained firms have lower cash holdings. The positive association between corporate risk-taking and cash holdings is weaker for financially constrained firms than for nonconstrained firms.

For investors, investment decisions that include the cash holding assessment would also consider the firm-level uncertainty surrounding the firms.

This study explores the joint effect of corporate risk-taking and financial constraints on cash holding, and hence considers the strategic adaptations to navigate uncertainty in strategies related to cash holdings in Saudi Arabia.

This study aims to examine the association between environmental, social and governance (ESG) performance and cash holdings, as well as whether this association is moderated by Shariah-compliant status. The aim was to test the joint effect of two ethical precepts, namely, the ESG and Shariah-compliant status, in explaining variations in cash holdings.

A sample set that consisted of 9,244 firm-year observations from 25 countries from 2016 to 2020 was analysed using regression analysis. Firm-level data were sourced from Thomson Reuters and Refinitiv databases, while country-level data were derived from the World Bank and Hofstede Insights websites.

Firms with greater ESG performances were found to have higher cash holdings. The positive association between ESG performance and cash holdings was greater for Shariah-compliant firms compared to non-Shariah-compliant firms. In support of the stakeholder theory, the evidence indicated that Shariah-compliant firms with higher ESG commitments also have higher cash holdings as part of their corporate strategy.

These findings provided further comprehension to investors that ESG practices among Shariah-compliant firms are essential information during investment decision-making processes.

These findings highlighted ethical corporate practices through two frameworks, namely, ESG commitment and Shariah compliance; hence, contributing towards strategies to reach the Sustainable Development Goal 16 of promoting just, peaceful and inclusive societies.

This study has focused on the motives for cash holdings by considering the ethical precepts embodying ESG and Shariah compliance to uphold the positive impact of high cash reserves.

This study aims to examine the effect of audit firm tenure (AFT) on corporate tax avoidance (CTA) and the moderating effect of the COVID-19 pandemic.

The sample comprises 41,074 firm-year observations from 32 countries from 2015 to 2020, for which data are collected from various sources: financial data from the Refinitiv database, country corporate tax rates from the Tax Foundation, and other country-level data from the World Bank database. The authors use the book tax difference to measure CTA and multiple proxies for AFT.

This study finds that a longer AFT is associated with higher CTA, confirming the notion that long AFT impairs auditor independence. The findings remain robust when considering various AFT proxies, incorporating Hofstede’s cultural factors, using weighted least-squares estimation and addressing endogeneity through propensity score matching. This study also finds a non-linear relationship between extended client and auditor relationships and CTA, supporting the mandatory audit firm rotation regulation and increasing investors’ caution regarding the consequences of extended client–auditor relationships on firm behaviour.

This study offers new evidence on the effect of the COVID-19 pandemic on the link between AFT and CTA and documents a non-linear relationship between AFT, which has not been addressed in prior studies.

The findings of this study have several significant practical implications. First, governments and policymakers gain insights into the consequences of extended auditor–client relationships, hence calling for a review of auditing and taxation regulations. Second, the findings provide important insights into the issue of auditor independence, especially during long engagements and crises such as COVID-19. Finally, investors and tax authorities should be more cautious about the risks of aggressive tax avoidance during crisis periods.

To the best of the authors’ knowledge, this is the first study to use a global data set to investigate the effect of AFT on CTA during the COVID-19 pandemic.