The purpose of this study is to examine the relationship between audit characteristics and firm investment efficiency level. Audit characteristics have been characterized using audit committee (AC) independence and external auditor choice. Top 200 Malaysian listed companies based on market capitalization were selected as a sample. Binomial logistic regression analysis was employed to test the hypotheses for 3 years, that is, 2009, 2010, and 2011. The statistical results show no relationship between AC independence and investment inefficiency, while auditor choice was shown to be positively significant only in 1 year of the study, but was not significant in the other 2 years of study. The results provide further confirmation of the role of corporate governance in enhancing the investment performance of the company. This study provides an indicator to shareholders and investors that a company with strong governance structure will likely make better investment decision. Managers under strong governance are prevented from taking an aggressive investment risk approach that may result in overinvestment. In addition, the company will carefully plan to have an adequate capital so that a good opportunity investment will not being passed due to insufficient financing that will result underinvestment. This study is original, as it focuses on the direct relationship between corporate governance mechanism and firm investment efficiency level that is scarce in the literature, with a special focus on emerging markets in the process of developing their best governance practices.