Table 2 Operational definitions of... | Emerald Publishing

Table 2

Operational definitions of variables

#	Variables	Definitions	Source(s)
1	ABS (dependent variable)	Modified Dechow and Dichev (Francis 2005 model)	DataStream
Panel A: Fee variable
2	NAS	Nonaudit fees deflated by total fees	Annual report
Panel B: Corporate governance variables
3	AC_FIN	An indicator of “1” if the audit committee is financially literate and also the number of the audit committees that become the member of accounting association or “0” otherwise	Annual report
4	AC_IND	An indicator of “1” if all the audit committee is all independent or “0” otherwise	Annual report
5	AC_MEET	The proportion of audit committee meetings to the numbers of audit committees	Annual report
6	AC_SIZE	The number of executive and nonexecutive directors held in the companies	Annual report
Panel C: Institutional variables
7	BOD_BUMI	Percentage of Bumiputera director on the board	Annual report
8	FAMILY_F	An indicator variable of 1 if the companies are owned by more than one family member or “0” otherwise	Annual report
9	POLCON	An indicator variable of 1 if the firm is politically connected, or “0” otherwise	Johnson and Mitton (2003)
Panel D: Control variables
10	BIG_4	An indicator variable that takes the value of 1 if the auditor is a Big 4 auditor, zero otherwise	Annual report
11	LOSS	An indicator variable that takes the value of 1 if the firm recorded a loss in accounting return	Datastream
12	LEVERAGE	Total debt deflated by total equity	Annual report
13	EQUITY	An indicator variable that takes the value of 1 if the firm recorded negative equity during the sample period, zero otherwise	Datastream
14	ASSETS	Natural log transformation of total assets	Datastream

#	Variables	Definitions	Source(s)
1	ABS (dependent variable)	Modified Dechow and Dichev (Francis 2005 model)	DataStream
Panel A: Fee variable
2	NAS	Nonaudit fees deflated by total fees	Annual report
Panel B: Corporate governance variables
3	AC_FIN	An indicator of “1” if the audit committee is financially literate and also the number of the audit committees that become the member of accounting association or “0” otherwise	Annual report
4	AC_IND	An indicator of “1” if all the audit committee is all independent or “0” otherwise	Annual report
5	AC_MEET	The proportion of audit committee meetings to the numbers of audit committees	Annual report
6	AC_SIZE	The number of executive and nonexecutive directors held in the companies	Annual report
Panel C: Institutional variables
7	BOD_BUMI	Percentage of Bumiputera director on the board	Annual report
8	FAMILY_F	An indicator variable of 1 if the companies are owned by more than one family member or “0” otherwise	Annual report
9	POLCON	An indicator variable of 1 if the firm is politically connected, or “0” otherwise	Johnson and Mitton (2003)
Panel D: Control variables
10	BIG_4	An indicator variable that takes the value of 1 if the auditor is a Big 4 auditor, zero otherwise	Annual report
11	LOSS	An indicator variable that takes the value of 1 if the firm recorded a loss in accounting return	Datastream
12	LEVERAGE	Total debt deflated by total equity	Annual report
13	EQUITY	An indicator variable that takes the value of 1 if the firm recorded negative equity during the sample period, zero otherwise	Datastream
14	ASSETS	Natural log transformation of total assets	Datastream

Note(s): Data from annual reports are hand collected. Annual reports are downloaded from Bursa Malaysia's website