The financial reporting systems quality (FRSQ) and institutional investors: The case of an emerging market

Attracting institutional shareholders in stock markets has drawn the attention of financial market regulators and researchers. Globally, governments are trying to attract investors by reducing information asymmetry improving governance transparency, order produce a high-quality reporting system. Hence, this study investigates impact systems quality (FRSQ) on ownership. It uses all non-financial listed companies Bursa Malaysia over period 2009–2016. Ordinary Least Square (OLS) regression based two-way cluster-robust standard errors (firm year) is used achieve objective study. The findings show positive relationship between ownership FRSQ, suggesting that prefer invest firm effective FRS. differs from previous research terms capturing FRSQ wider set attributes, namely audit committee characteristics (size, independence, diligence expertise), internal function (IAF) cost sourcing arrangements, external auditors’ attributes (audit fees, industry auditor specialist, auditor’s reputation size) yet be examined either developed or developing countries. offers insights for other emerging economies which process undertaking regulatory reforms their corporate structure. Managers could learn aspects should considered keep strong position its ability investors.