The corporate scandal that lead to the collapsed of
several companies in Malaysia had damaged the investor and shareholders’ confidence
towards the reliability of the financial reporting. Basically financial
reporting is an important report as it is the main source of information that
will inform the investors and shareholders on the company’s overall
performance. To restore back their confidence, it caused regulator to enforce
the establishment of audit committee to monitor the action and activity done by
the management. Therefore, the aim of this study is to explore and examine the
attributes of an effective audit committee and good corporate governance of the
public listed companies in Malaysia. Basically this study uses audit committee
characteristics such as independence, frequency of meeting and expertise to
measure the effectiveness of audit committee. The data consist of 207
non-financial listed companies in the main market of Bursa Malaysia from year
2014 to 2015 and it does not include financial listed companies due to the
different statutory requirements. Based on the findings of the study, it show
that there is a high level of good corporate governance among publicly listed
companies in Malaysia. The Regression results indicated that the audit
committee independent, frequency of meeting and expertise of audit committee
members have significant influence on good corporate governance. The frequency
of meeting was found to be the most important factor that contribute to the
level of good corporate governance of the public listed companies in Malaysia.
Thus from the result of this study, it provide support for the mandatory
establishment of audit committee for all companies listed to comply with the
Bursa Malaysia Listing Requirements. Besides, it was suggested that the
characteristics of audit committee is essential in ensuring that the audit
committee effectiveness in reducing agency problem between managers and
shareholders as it can act as a tool to monitor the managers’ behavior to act on
the best interest of the shareholders.