The political economy of convergence: The case of IFRS for SMEs.

This paper examines the processes used by the International Accounting Standards Board (IASB), in achieving widespread convergence to the International Financial Reporting Standards (IFRS) by developing economies. Global convergence of financial reporting standards is a politically motivated agenda. The movement towards standardisation of financial reporting has been described in various ways including, adoption, application, transitioning, implementation (Brown and Tarca 2012), harmonization (Strouhal 2012) and convergence (Stevenson 2012; Street 2012; Pawsey, Brown and Chatterjee 2013). In this paper the term convergence encapsulates the efforts by developing countries to revise their national standards to be the same as IFRSs. The IFRS for Small and Medium sized Enterprises (IFRS for SMEs) was partly to facilitate developing economies’ commitment to convergence (UNCTAD 2009). Introducing a two-tier system implied by a special IFRS for SMEs is the first synthesis of the international convergence process (Rodrigues and Craig 2007). Given that small and medium sized enterprises (SMEs) are increasingly important in the global economy, it is equally important that there is a clear set of principles underpinning financial reporting for these entities. However, there is limited discussion on the development of the IFRS for SMEs in the academic literature. Only very recently have academics from developing countries engaged in discussions on IFRS for SME adoption (Phang and Mahzan 2013). Therefore, this paper provides an understanding of the activities that led to the promulgation of the standard and the efforts of the World Bank, the United Nations and other international organisations to bring this issue onto IASB’s agenda since early 2000. This paper is timely as the IASB has commenced its comprehensive review of the IFRS for SMEs (IASB 2012)

Does Commitment to Anti-Corruption Matter?

The Malaysian capital market regulators take great efforts to continuously enhance corporate governance codes and practices to improve transparent reporting and enhance board responsibility and investors’ protection. In 2017, the Malaysian Institute of Corporate Governance published a report assessing the transparency of reporting by top 100 listed companies in respect of anti-corruption, organizational disclosure, and sustainability. This study uses this unique set of data on scores on anti-corruption commitment, organizational transparency, and sustainability to investigate the association between corporate transparency and firm value, and whether political connections moderate this relationship. Not surprisingly, findings show that listed government-linked companies (GLCs) have higher scores than non-GLCs, such as family and foreign firms. Firms with enhanced anti-corruption commitment are more likely to have higher firm value, and this relationship is stronger for politically connected firms. The implications for investors and regulators are discussed in this paper

APLIKASI PREDIKSI JUMLAH PENDAPATAN PERUSAHAAN FREIGHT-FORWARDING DENGAN METODE BACKPROPAGATION, ALGORITMA INISIALISASI NGUYEN WIDROW DAN MOMENTUM (STUDI KASUS: PT. INDO BAHARI EXPRESS)

Perusahaan Freight-Forwarding merupakan perusahaan yang berperan penting dalam memperlancar arus pengiriman barang baik dari produsen ke konsumen, dari satu pulau ke pulau lain, maupun dari negara satu ke negara lain. Atas jasa sebagai perantara, perusahaan menerima imbalan sebagai suatu pendapatan. Namun, terdapat kendala yaitu terkadang beberapa customer terlambat dalam pembayaran sehingga perolehan pendapatan perusahaan setiap bulannya tidak pasti, yang menyebabkan aktivitas perusahaan menjadi terganggu karena ketidaksiapan perusahaan dalam pembiayaan aktivitas perusahaan. Oleh karena itu, perusahaan memerlukan sebuah aplikasi yang dapat melakukan peramalan mengenai jumlah pendapatan yang akan diperoleh perusahaan di masa yang akan datang, sehingga masalah ketidaksiapan perusahaan dapat diatasi dan dihindari. Penelitian ini bertujuan untuk membangun sebuah aplikasi prediksi jumlah pendapatan perusahaan freight-forwarding dengan metode Backpropagation, algoritma inisialisasi Nguyen Widrow dan Momentum. Data penelitian berupa data pendapatan perusahaan setiap bulan dari tahun 2011-2015 yang diambil dari PT. Indo Bahari Express. Pengujian dilakukan dengan menggunakan K-Fold Cross Validation dengan nilai k = 6. Hasil penelitian menunjukkan bahwa arsitektur terbaik pada penelitian ini dengan kombinasi parameter-parameter terbaik yaitu dengan laju pembelajaran (α) sebesar 0,9; parameter momentum (μ) sebesar 0,3; 10 hidden neuron, maksimum epoch sebanyak 500 epoch, dan target error sebesar 0,01 dengan perolehan nilai Mean Square Error (MSE) pengujian sebesar 0,01256

Accounting Functions Outsourcing and SMEs: Empirical Evidence from Iran

The purpose of this paper is to examine the factors that influence the outsourcing of accounting functions in Iranian manufacturing small and medium enterprises (SMEs). Using transaction cost economics (TCE) and resource-based theories, results from a questionnaire survey of 658 SMEs show that outsourcing of accounting functions is positively associated with trust of the SME owner/manager in an external accountant. In addition, the technical competence is positively and significantly related to outsourcing, but firm size was not supported in our sample

Ownership structured firms in Malaysia: audit committee characteristics and audit fees / Norziaton Ismail Khan, Susela Selvaraj Devi and Meng Chan Wai

The political economy shaped the ownership structure of corporations in Malaysia. The rapid growth of the economy has not diluted the concentrated ownership structure in the Malaysian firms. Malaysia has its own unique feature of ownership structured firms which can be divided into politically connected (PCON) firms, institutional ownership and managerial ownership (INST&MGRL) firms, and family ownership (FAMILY) firms. The purpose of this paper is to investigate whether PCON, INST&MGR and FAMILY firms are associated with higher audit fees. This study also examines the association between audit committee characteristicsIND, DIL and EXP and audit fees based on the revamped Bursa Listing Requirementsin 2008, which focus on audit committee characteristics. Using data from 567 firm-year observations from years 2008 to 2010, we find that PCON firms pay higher audit fees than INST&MGRL and FAMILY firms. Further, the association between audit committee IND, DIL and EXP and audit fees is positive and significant for PCON firms, suggesting that the government intervention is expected to produce better governance and improve the firm’s business performance. Thisis because the government has given much attention and initiatives to ensure that these firms perform in an effective way and assist the government to improve the economic growth

Women board members as a diversity tool for enhancing corporate governance and stakeholder value.

The continued failure of companies mainly with the majority of male board members prompted this research to establish the importance of board heterogeneity, the role of women board members, their characteristics and how their board presence can be utilised for improving corporate governance and stakeholder value.  This study derives from board composition which dictates that directors of substance should populate boards.  The debate on the utility value of women on boards was investigated using an interpretive enquiry.  Document review coupled with a semi-structured interview was administered to forty-two (42) respondents.  Purposive and snowball sampling were used to select respondents.  Results of the research showed that women are thinly populated in boards yet they are risk averse, prepare for meetings diligently, are objective, have integrity and are protective of the organisation.  The research recommends that bursaries and scholarships should be availed to women and girls so that they get chances to go through all levels of education and end up as managers, a step towards board membership.  The government of Zimbabwe should make sure that steps are taken to enforce the 50:50 principle in management and that to cascade to boards.  There should be advocacy for the need to infuse women leadership in all walks of life. Key words: Corporate Governance, Board Diversity, Women on Boards, NVivo, qualitative and Stakeholder Satisfaction

Big Data Analytics and Auditing: A Review and Synthesis of Literature

The use of data analytics in auditing is increasingly growing. The application of common data analytics to audit engagements appears to be lagging behind other areas of practice, even though data analytics is thought to represent the future of audit, and there are still few publications that have examined this influence. This article reviews data analytics in audits and its potential for future audit engagements to describe the evolution of this research trend and picture its future growth directions. Future audit research potential and difficulties are also discussed. Data analytics application in auditing has enormous potential for refining audit quality, decreasing errors, increasing process transparency, and enhancing stakeholders’ confidence. We conducted a systematic literature review using the PRISMA approach. A total of 100 articles published in English from January 2011 to November 2021 were identified through a systematic search of reputed databases, including Web of Science and Scopus and many others. Our analysis reveals that data analytics is a promising domain for the auditing practice as it improves audit efficiency and promotes audit work digital transformation. While reviewing the most pertinent literature in the context of data analytics in auditing, this study offers insights on potential new directions and waning views on big data analytics in auditing. Doi: 10.28991/ESJ-2023-07-02-023 Full Text: PD

Ethical Practice Disclosure of Malaysian Public Listed Companies

The Malaysian business world has seen a series of scandals amongst government-related companies in recent years, including 1Malaysia Development Berhad (1MDB), Lembaga Tabung Haji (LTH), Felda Global Ventures (FGV) and Khazanah Nasional Berhad (KHAZANAH). Despite having strong corporate governance policies, in addition to the Malaysia Code of Corporate Governance (MCCG), unethical practices and a lack of transparency remain a problem. This paper examines the level of disclosure of ethical practices by Malaysian public listed companies. Ethical practice disclosure is measured using the modified Ethical Commitment Index (ECI) with six themes derived from the literature: corporate ethical values; action to promote ethics; whistle-blowing policy; code of ethics; sustainability practices; and ethics committee. Conducting analysis of the annual reports of 1,115 companies across five years (2012-2016), this study found there is a need to improve several aspects of ethical practice disclosure. Although the findings suggest that companies supported the MCCG, with most of the companies complying with the recommendations of MCCG 2012 to uphold a high standard of ethical practice, supplementary practices (such as disciplinary action, programmes to support a code of ethics, whistle-blowers’ protection, and establishing an ethics committee) are still weak. This study suggests that regulator action is required to improve the level of ethical practice disclosure by Malaysian public listed companies

Ownership and segment disclosure : moderating effect of competitiveness in Malaysia / Jalila Johari, Susela Selvaraj Devi and Sureshchandra Ramachandra

This paper aims to investigate whether firm and industry level of competitiveness has had a moderating effect on the level of segment disclosure, prior to the introduction of IFRS 8 – operating segments for companies, with differing ownership structures in Malaysia. A self-constructed segment disclosure index using data was drawn from firms listed in the Malaysian stock exchange for the period of 2006 to 2008. A total of 1,752 firm-year observations were used. The results show that competitiveness, either at the firm level or industry level experienced no effect on the extent of segment disclosures during the duration of pre-IFRS 8. However, the findings suggest that accounting qualifications of audit committee members, sizes of firms, years of listing, profitability and analyst following of the firms have significantly explain the extent to which segment information was disclosed in Malaysia

The influence of ontological and epistemological stance on educators’ view towards human governance

The purpose of this study is to explore the accounting educators’ views toward the principles of human governance and the influence of ontological stance (or worldviews) and epistemological stance (view of knowledge) on their view. The data was collected using questionnaires and semi-structured interviews. 90 accounting educators from Malaysian public universities had responded to the questionnaire and 28 had been involved in the interview. All variables (except demographic information) were measured based on 5-point Likert scales ranging from strongly disagree (1) to strongly agree (5). The descriptive analysis and Spearman’s rank order correlation are used for analysis. The generic steps analysing are used for qualitative inquiry proposed by Creswell (2003). The finding revealed that accounting educators view human governance as a framework of good conduct of human being which emphasized both spiritual and physical well beings. There are positive medium correlations between ontological stances and educators’ view towards the concept of human governance as good governance. There are only positive small correlations between epistemological stances towards the educators’ view of human governance as good governance. This study provides new additional literature on ethics and empirical evidence on the concept of human governance