SUMMARY
This study aims to find a relationship between board of directors’ characteristics and the likelihood thata company receives a modified audit opinion (as a measure of the external reporting of companies) inMalaysia. To test our hypotheses, we use the pooled cross-sectional logistic regression analysis for 136firm-year observations listed on Bursa Malaysia over the period 2009-2011.The evidence we uncover isconsistent with the hypotheses that companies with large board size and greater financial expertise ofthe board of directors are less likely to receive a modified audit opinion. The results obtained in this studyare consistent with the listing rules of the Malaysian-Corporate-Governance Code and the requirementsof the Bursa Malaysia Corporate-Governance-Guide, which consider and the requirements of the BursaMalaysia Corporate-Governance-Guide, which consider the significance of the board of directors as anaspect of good corporate governance and its critical role in the Malaysian financial reporting process.