Impact Of Merger And Acquisition On Debt Management Ratio: A Case Study In Malaysian Banking Sectors

This study based on efficiency theory of shareholder’s wealth maximization of acquisition principle attempted to investigate the debt management ratio of ten Malaysian anchor banks after undergoing mega merger and acquisition program which was completed in the year of 2000. As efficiency theory consists of three elements that are financial synergy, operation synergy and managerial synergy, the study will primarily focus its analysis on financial synergy (debt management). Using accounting technique (financial statement analysis) to draw the implication, the study results highlighted the performance of those anchor banks from the year 2000 to 2004. The ratio analysis tools employed covered total liabilities to total assets, total liabilities to total equity, times interest earned, and cash debt coverage ratio. The findings shows that in general, the anchor banks recorded improvement in term of debt management; yet more comprehensive strategies have to be executed to further enhance the financial synergy. The generalization however shall be done in more cautious as the study inherits several limitations including the application of financial statement which based on historic cost rather than reflecting the current market situation. The study perhaps can be extended to include the analysis of earnings performance ratios and market/investor perception toward the resilience of those anchor banks after completing the merger and acquisition mega program

Transfer Pricing And Taxation Implications Disclosure In Segmental Reporting: Malaysian Evidence

Transfer pricing has emerged as common practice among highly diversified companies. Company goes for either domestic transfer pricing or international transfer pricing for several distinctive reasons. While domestic transfer pricing aims for enhancing divisional autonomy and divisions’ managers, international transfer pricing expects for less taxes, tariff, duties and excises. Therefore, international transfer pricing has significant taxation implication. With expansion of transfer pricing, financial statement users demand unconsolidated account to thoroughly evaluate specific segments’ performance, track transfer pricing practices and the taxation implication on the companies. Due to these increasing demands, segmental reporting is impartially needed. The present paper highlights the (1) theoretical aspect of transfer pricing and its taxation implication and (2) the disclosure of transfer pricing and its taxation implication in Malaysian segmental reporting environment. A study of 80 companies listed on Malaysian Board has been conducted to evaluate the transfer pricing and its taxation implication disclosure in Malaysian’s segmental reporting environment. As exploratory attempt, the study found that companies voluntarily disclose the basis of setting up transfer price. However, such disclosure is not adequate to assist performance evaluating and decision-making process as transfer price is only been reported in business segment, taxation implication has been disclosed as consolidated figure and moreover transfer pricing and its taxation implication is voluntary disclosure. Intensive effort should be carried out to improve those disclosures in future particularly by imposing mandated reporting for transfer pricing and its taxation implications. Further study shall be conducted to expand the sample, intensify segment report preparers’ behavioral study and cross analysis between countries

Conceptual Framework on Antecedents of True and Fair View Reporting Surrounding Migration to Accrual-Based Accounting by Public Sector Entities: A Case of Federal Statutory Bodies (FSB) in Malaysia

Following the institutional reforms in Malaysia, the Federal Government issued Treasury Circular PS 1.2/2020. Federal Statutory Bodies (FSBs) are now required to adopt the Malaysian Public Sector Accounting Standard (MPSAS) as the standard for preparing financial statements. While most private sectors strongly embrace accrual accounting systems and derive many benefits from them, the practice and application in the public sector, including FSBs, is still in its infancy. Therefore, this study examines the antecedents of true and fair view reporting in the context of migration to accrual accounting by FSB in Malaysia. This study is due to the lack of research on accrual accounting in the public sector, as researchers rigorously focus on the private sector that controls the economy. In addition, there are few studies on the conversion of the public sector in emerging economies to accrual accounting. The study provided a conceptual discussion on the antecedents that potentially affect the true and fair view reporting through the adoption of accrual accounting. The discussion is expected to benefit many stakeholders, especially regulators and policymakers, as emerging economies such as Malaysia continue to actively pursue institutional reforms. By adding new variables from the study so that they can be used in various and extensive aspects of the research

Corporate Governance And Directors’ Remuneration In Selected ASEAN Countries

This paper briefly discusses the corporate governance and directors’ remuneration as being practiced by five different ASEAN countries i.e. Singapore, Malaysia, Indonesia, Philippines, and Thailand. Governance is about how an entity is being directed and controlled, while corporate governance is about a system, procedure or mechanism of balancing between directing and controlling business entities’ internal matters and the demand of their external shareholders and stakeholders. The paper summarizes the development of corporate governance and directors’ remuneration in these countries. An attempt has also been made to highlight issues regarding the need of disclosure of individual director’s remuneration, the need of shareholders’ approval on directors’ remuneration, the need of shareholders’ approval on stock based incentive plan, approval of directors’ remuneration by a committee at board level, the separation of role of the Chairmen of Board of Directors and Chief Executive Officers, and the recommended maximum length of period offered to directors. It later focuses on the progress made by these countries in further uplifting their corporate governance practices. The paper also examines some arising pertinent and puts forth some recommendations on how the future direction of the development of corporate governance in ASEAN countries with respect to directors’ remuneration shall take shape

Sensitivity Of Socially Responsible Investment Behaviour To Experience And Size Of Funds

This paper examines the moderating effect of experience and size of fund towards socially responsible investment (SRI).A survey was conducted to get the responses of fund managers, and data were analysed using a multi-group approach of Structural Equation Modelling (SEM).At intentional level, there was a significant moderating effect on the relationship between attitudes and caring ethical climate towards an intention to SRI among less experienced fund managers. There was a significant moderating effect on the relationship between subjective norms and perceived behavioural control towards an intention to SRI among more experienced fund managers. There was also a significant moderating effect on the relationship between subjective norms and caring ethical climate towards an intention to SRI among small-sized fund managers. At behavioural level, there was a significant moderating effect on the relationship between moral intensity and SRI behaviour among less experienced fund managers. There was also a significant moderating effect on the relationship between moral intensity and caring ethical climate on SRI behaviour among bigger-sized fund managers. This paper conduits the literature gap by expanding the understanding on the moderating impact of experience and size of fund towards SRI, provides insights to policy makers in carrying out appropriate talent development strategies in accumulating the support of fund managers towards SRI-related initiatives in the capital market, and reveals the potential contribution of fund manager talent management in sustainable development through SRI. The paper offers vision on fund manager talent management to forefront the progress of SRI in emerging economies

EVALUATING THE IMPACT OF INNOVATION ON MOSQUE COOPERATIVES’ ADAPTIVE CAPACITY IN THE AGE OF DISRUPTION

The disruptions such as the pandemic Covid-19 driven Movement Control Order (MCO) and the Fourth Industrial Revolution (4IR) have delivered dynamism in the form of accelerated change, technological innovation, convergence, new sources of growth or disparities, and new technology costs and investments. These are expected to have an impact on the economy, society, and politics of the industry and its sub-sector. Nevertheless, the existing Dasar Koperasi Negara 2 (DKN 2), 2011-2020, and the most recent mid-term review report of DKN 2 did not specifically mentioned about preparing or building the country’s co-operative sector based on those disruptions, though undeniably there are some elements in these two documents reflecting such move towards it. The silence and absence cast doubt on local mosque cooperatives' ability to adjust in the face of upheaval. It also creates concern on driving factors of mosque co-operatives’ adaptive capacity. Thus, this proposed study aims to ascertain elements of mosque co-operatives’ 4IR adaptive capacity, then to evaluate the interactions and relationships between organisational, product & process, and social innovation and adaptive capacity of mosque co-operatives. Employing survey method, this study will engage the Chairman of Board of mosque co-operatives in state of Selangor as a respodent. The feedback will be analysed using the Structural Equation Modelling technique via SmartPLS. Understanding the variables that drive innovation allows mosque cooperatives to strengthen their adaptive ability by concentrating efforts on improving specific competencies and boosting the sub-preparation sector's for future shocks. It also provides insights to key stakeholders viz. MEDAC, SKM, ANGKASA, and IKM in planning enhanced training moduls, standard operating procedures, action plan relating to a specific innovation process that can enhance mosque co-operatives’ adaptive capacity, including in in finalising the Dasar Koperasi Negara 3, 2021-2030. This proposed research aims to answer the following research questions:- 1. How organisational innovation affect mosque co-operatives’ adaptive capacity? 2. How product and process innovation affect mosque co-operatives’ adapative capacity? 3. How social innovation affect mosque co-operatives’ adapative capacity

THE IMPACT OF PANDEMIC COVID-19 ON THE ACTIVISM, FINANCIAL AND DIGITAL WELL BEING OF MOSQUE INSTITUTION

The pandemic driven Movement Control Order (MCO) caused pain to mosque institutins in terms of activities, financial and digital. As the pandemic Covid-19 hit the country in early 2020, mosques were closed, number of congregation reduced, Friday and tarawih prayers were postponed, sadaqah collection dropped, and lesser knowledge based activities or Islamic teachings programmes were recorded due to social distancing order as the authority intended to stop the lethal virus transmission. In certain circumstances, social gathering activities were permitted at mosque; however, with a strict permission and stringent standard operating procedures. Coupled with lack of digital literacy, skills and equipment, as well as insufficient financial resources, mosque's engagement and visibility with larger societal members were also unfavourably impacted. Consequently, mosque institution is not able to carry out its function effectively as a centre of knowledge, centre of economy, and centre of community engagement. The research aims to explain the impact of pandemic Covid-19 towards mosque institutionn. Specifically, this conceptual paper discusses the implication of pandemic Covid-19 on activism, financial and digital well-being of mosques. It explores initial publications like academic articles, news, reports, and ministerial statements about the issue. The findings indicated the impact of pandemic Covid-19 towards mosque institutions’ well-being in the three areas i.e. activism, financial, and digital, and the response of mosques’ leadership and Muslim community. The study offers conceptual discussion, and generalisation take place cautiously. The value of the research embedded in its intention to assess the impact of pandemic Covid-19 on mosque institutions from three different dimensions namely activism, financial and digital. Moreover, the findings shall enhance the preparedness of mosque institution in those three areas to brace future shock. The findings also shall support the aspiration of SDG 16 in preparing mosque as a peace, justice and strong institution for community

Study Of Competitive Disadvantage Of Segmental Disclosure Practices In Malaysia

The objective of this study is to empirically examine the competitive disadvantages experienced by the companies in disclosing segmental information in the Malaysian environment with the introduction of the new MASB 22, Segment Reporting by Malaysian Accounting Standard Board (MASB)

Factors Influencing Socially Responsible Investment Behaviour among Institutional Investors in Malaysia

Socially responsible investments (SRI) have been gaining momentum since the beginning of the millennium. This phenomenon has attracted multiple assessments; however, there is still limited literature which examined SRI behaviour in Asia, including Malaysia using an integrated and validated model. Therefore, this study aims to conceptualise and validate a model examining factors that influence intention and SRI behaviour. Using the Theory of Planned Behaviour (TPB) as a core theory, the research framework is extended with moral intensity – a component of the Issue-Contingent Model (ICM) and caring ethical climate – a component of the Ethical Climate Theory (ECT). The deployment of the extended TPB permits the simultaneous assessment of the influence of attitude, subjective norms, perceived behavioural control (personal factors), moral intensity (contextual/situational factor), and caring ethical climate (organisational factor) towards intention and SRI behaviour

What prompts firms to choose between business and geographic segments as a primary segment?

Purpose – The purpose of this paper is to investigate what causes a firm to choose between a business segment and a geographic segment as a primary segment for its segmental information disclosure. It seeks to examine Malaysian firms' experiences as they disclose segmental information under the new accounting standard known as FRS 114, Segment Reporting. Design/methodology/approach – The paper involves 374 Malaysian public-listed companies which disclosed segmental information in their 2006 annual reports. Four hypotheses are developed to examine the influence of these five factors, namely the size of the company, listing status, financial leverage, financial performance, and industrial membership. The non-parametric test is employed to test the formulated hypotheses. Findings – The results reveal two important outcomes: first, size of company, financial performance, and industrial membership are significantly associated with the choice of a primary segment; and financial leverage of a company and listing status are not significantly associated with the choice of a primary segment. Research limitations/implications – The limited number in the sample and inherent segmental reporting problems present limitations. Practical implications – The paper implies extensive auditing work as the new standard requires more extensive disclosure for the primary segment, although the standard allows the adoption of primary segment reporting at management's discretion. Originality/value – The paper's value lies in determining what motivates a company to disclose a business segment or a geographic segment as its primary segmental reporting basis.Accounting standards, Information disclosure, Malaysia