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

Unveiling the transition: Factors influencing true and fair view reporting in the accrual-based accounting migration of Malaysian federal statutory bodies

This study delves into the factors impacting the adoption of true and fair financial reporting during the transition to accrual accounting in Malaysian Federal Statutory Bodies (FSB). Despite administrative reforms from the 1980s to the most recent reformation, Malaysia’s public sector performance has lagged, prompting this investigation into the adoption of Malaysian Public Sector Accounting Standards (MPSAS) and accrual accounting in response to the delayed performance of Malaysia's public sector. The research was based on self-administered, Five Likert-scale questionnaires distributed to all heads of public accountants in 132 FSBs. There were 99 questionnaires returned for analysis. The final analysis used 99 usable responses, and the data was analyzed using SPSS. The results indicated significant correlations between Economic Consequences, Political Interventions, and True and Fair View reporting. Economic consequences were found to have the most significant impact on true and fair reporting, supported nuanced relationships, and political interventions. The findings of the regression analysis provided evidence for intricate associations, however, it is important to realize some constraints methods were acknowledged, such as demographic limits and the reliance on quantitative methodologies. The independent Board of Directors (BOD) and the higher-level management ensure those factors, such as the impact of Political Interventions on the reporting process undertheir scrutiny, as well as take proactive implementation measures to prevent the escalation of the management level from worsening. Top management can ensure that, the economic decisions made have to be thorough, as they dramatically impact reporting. The study provides valuable insights into financial reporting dynamics, suggesting avenues for future research to address identified limitations and incorporate qualitative methodologies

Factors Influencing True and Fair View Reporting of Federal Statutory Bodies in Malaysia

Background - After the institutional reforms happened in Malaysia, the Federal Government had issued the Treasury Circular PS 1.2/2020, FSBs now must adopt Malaysian Public Sector Accounting Standard (MPSAS) as the standards for the preparation of the FSBs’ financial statement. Hence, the study is intended to focus on the factors influencing the true and fair view of the FSBs’ reporting. Purpose - The study is to investigate the influence of political intervention, economic consequences, societal values, balancing cost-benefit concerns on the true and fair view reporting and gender as moderating role. Design/methodology/approach - The study is positivism research and will be conducted the quantitative method as in self-administered questionnaire and closed-ended questions, bilingual (English and Malay) questionnaires will be submitted via email to Chief Financial Officer (CFO) of the FSB. Sample of 97 questionnaire will be submitted out of 132 population by using (Krejcie and Morgan, 1970) table. The theory used is the Institutional Theory. Findings/Expected Contributions - The expected findings are, all factors; political intervention has positive and significant influence on the true and fair view reporting, economic consequences have positive and significant influence on the true and fair view reporting, societal values has positive and significant influence on the true and fair view reporting, balancing cost-benefit concerns have positive and significant influence on the true and fair view reporting. While gender moderates the relationship of political intervention, economic consequences, societal values, and balancing cost-benefit concerns on true and fair view reporting. The reasons of the expected findings are to ease the adoption of MPSAS 1 in FSB, to ensure the plans and strategies to reduce fraudulent activities meeting objectives, to highlight related initiatives, acts, regulations, programmes and policies such as Institutional reforms initiatives which is New Public Management Reforms, National Anti-Corruption Plan (NACP) and New Economic Model (NEM) programmes which initiating to improve transparency or institutional reform in FSBs and to widened up and enhance the scope of the Institutional Theory by adding up new variables from the study so that in can be used in various and vast aspects of research. Research limitations - The limitation is to make sure the questionnaires are being answered by the CFOs themselves not their representative. Originality/value - Lack of research being done in public sector and researchers are more rigorously studied more towards private sectors as the private sectors are the market controller to the economy. This is because previous research of public sector disclosure has tended to focus solely on developed countries and very less in Malaysi