THE MODERATING EFFECT OF INDUSTRY EXPERT TO THE RELATIONSHIP BETWEEN COOPERATIVE CHARACTERISTICS AND ANNUAL FINANCIAL REPORTING QUALITY

Abstract

The main focus of the National Cooperative Policy 2011-2020 is to ensure that cooperatives in Malaysia comply with cooperative legislation. This study aimed to test the relationship between the characteristics of the cooperative with the quality of the cooperative’s annual financial reporting. The independent variables of the cooperative characteristics tested were the size and type of business. The selected study data is the annual report of the cooperative and a total of one hundred and twenty annual reports for 2010 and 2014 were used. Data were analysed using multivariate regression analysis and hierarchical multivariate regression. The results showed that the size and type of business had a significant relationship with the quality of the cooperative’s annual financial reporting at the ninety five percent and ninety nine percent confidence levels, respectively. The results of the moderating factor analysis of industry experts showed the effect of the relationship between business type and the quality of cooperative’s annual financial reporting at a confidence level of ninety five percent. While the moderating factor of industry experts did not show an effect on the relationship between the size of the cooperative and the quality of the cooperative's annual financial reporting. Thus, it can be concluded that the characteristics of cooperatives and industry experts are important elements that influence the quality of annual financial reporting of cooperatives in Malaysia.