The Relationship Between Budget Participation, Organizational Commitment, The Use of Management Accounting System, The Use of Performance Measures Information, and Managerial Performance in Malaysian Local Authorities

This study examined the relationship between budget participation and managerial performance in Malaysian local authorities. In particular, it aims to identify the mediating effects of organizational commitment, the use of management accounting system (MAS), and the use of performance measures information. A total of 131 heads of department in Malaysian local authorities participated in the survey. A structural equation modeling was utilised to examine the direct and indirect effects of budget participation on managerial performance through path analysis. The findings from the research revealed that budget participation influences managerial performance via the mediating variables of organizational commitment, the use of MAS, and the use of performance measures information. Several limitations may be noted in this study. First, the research survey was conducted only in local authorities. Thus, the results may not be generalized to other public organizations. Secondly, this study only involved organizational commitment, the use of MAS, and the use of performance measures information to explain the relationship of budget participation on managerial performance. Thirdly, the use of respondents’ perceptions to measure the constructs is subject to the respondent bias. The theoretical contribution of this study is to extend earlier literature by addressing the relationship in which, budget participation, organization commitment, the use of MAS, and the use of the performance measures information can be interrelated in providing explanations of managerial performance. The practical contribution for this study is that its findings can have practical relevance in the current management setting in Malaysian government organization. The results from the present study also provide insights on the roles of budget participation as management mechanism by local authorities’ managers in evaluating their performance

Analisis Sistem Pengurusan Belanjawan Dalam Konteks Sistem Belanjawan Diubahsuai Kajian Kes : Di Kementerian Perdagangan Perdagangan Antarabangsa Dan Industri (MITI)

This study focuses on the financial management system of Malaysian government in the context of operational expenditure. In practice, this system is managed by the Treasury Department, which is under the Ministry of Finance. The Treasury is responsible in managing the governmental expenditure and distribution of governmental wealth in completing project or any governmental projects. The Treasury also prepare for the Malaysian Annual Budget. The proposed and approved budget expenditure is for the use of all governmental departments, ministries, agencies to cany out the governmental projects efficiently and effectively. However, the approved budget is only limited to a certain phase of target expenditure. This is the criterion of Modified Budget System (MBS). There is four main criteria in MBS namely confirmed target expenditure, agreement report programme, exception report programme for those agencies that do not comply the mutual needs and evaluation report programme that decides on whether the objectives of the programmes are fullfilled in identifying problems and constraints towards the original goals. Hence, a study has been done at the Ministry of International Trade Industry (MITI), Its main objective is to identify how the management system of Malaysian government have been carried out using the concept of MBS. The scopes are based on the four main criteria in MBS. The methodology of this study is both quantitative and qualitative methods. In addition, this study also uses a content analysis and unstructured interviews to gain relevant data and information needed for this study. The findings show that the performance of MBS at the MITI is on the trial phase. There are ample spaces for improvement. MITI was carry out four main programmes namely support service, policy and research, developmental trade and industry programmes. Therefore, MITI needs a big budget to carry out these programmes. Until 1997, MITI has been asking for additional grant. In addition, the MITI evaluation plan programme shows lack in efficiency and effectiveness of the carried out programmes. Hence, the MBS committee at MITI should monitor and resolve these problems in order to achieve MITI planned goals

The mediating effect of performance measures used in budget participation and managerial performance relationship

In most organization, different performance measures are employed to assess different aspects of managers performance.Some of the measures have not been developed and some of them have been developed in a very selective way and some presented but not used or only partly used.Hence, this study examined the effect of performance measures used in budget participation and managerial performance relationship in Malaysian local authorities. A structural equation modeling was utilised to examine the direct and indirect effects of budget participation on managerial performance through path model analysis.The finding from the research shows that budget participation influence managerial performance via the mediating variable of the use of performance measures.This research survey was conducted only in Malaysian local authorities.Thus, result may not be generalized to other public organizations. The theoretical contribution of this study is to extent the earlier literatures by addressing effect in which, budget participation, the use of the performance measures can beinter-related in providing explanations of managerial performance.The practical contribution for this study is that its finding can have practical relevance in the current management setting in Malaysian government organization.The results from the present study also provide insights on the role of budget participation and the use of performance measures as management tool by local authorities’ managers in evaluating their performance

The influence of Islamic management practices in budget participation

Purpose - The influence of Islamic management practices on managers’ performance such as organizational commitment involves the development of an individual’s abilities and attitudes contribute towards organizational interests.Therefore, this paper examined the effect of motivational role of budget participation among Muslim managers in Malaysian Local Authorities.In particular, this study aims to indentify the mediating effects of organizational commitment as motivational role in budget participation and managerial performance relationship.Design/ Methodology/Approach - A Structural equation modeling was utilised to examine the direct and indirect effects of motivational role of budget participation among Muslim managers through path analysis.Findings – The result indicate that the mediating effect of organizational commitment strengthened the budget participation and managerial performance relationship.Research Limitations - This research survey only conducted in local governments organization. Thus, result may not be generalized to other public organizations.Originality/Value – The findings from this study can have practical relevance in the Islamic current management setting in Malaysian government organization. The results provide insights on the role of Islamic organization commitment as management approach by Muslim managers in evaluating their performance

Estimating the determinants of shadow economy in Malaysia

Shadow economy and tax evasion are two inseparable phenomena. The presence of shadow economy reduces the tax base and thereby eventually reduces overall tax revenue.It also creates opportunity for distortions in resource allocation especially in the labour market where firms participating in underground activities are not subject to labour regulations.In developing countries with weak government shortage of funds will force the government to resort to inflationary financing. This study presented new estimates of the Malaysian shadow economy and explored the link between the shadow economy and financial development with the inclusion of control variables such as real income per ca-pita, government consumption and tax burden.The size of the Malaysian shadow economy was calculated for the period 1971-2013 using the modified-cash-deposits-ratio (MCDR) approach recently proposed by Pickhardt and Sardia (2011). Also, using Ordinary Least Squares (OLS), Fully Modified OLS (FMOLS), Dynamic OLS (DOLS) and Canonical Co-integrating regression (CCR) to estimate the long-run model for the Malaysian shadow economy the contention that financial development can mitigate shadow economy was examined. The results showed that there was a non-linear long-run relationship between shadow economy and financial development, an inverted U-shape curve, suggesting that at lower (higher) level of financial development commensurate with higher (lower) level of the shadow economy. One policy implication from this finding was the role of the financial sector in reducing shadow economy by improving the accessibility to financing and the credit market

The adoption of performance measures and management accounting system in enhancing managerial performance in Malaysian local government

In many organizations, different performance measures were employed to assess different aspects of managers’ performance. Some of the measures were yet to be developed, some developed but only in a very selective way, and some already presented but not adopted or only partly used. At the same time, management accounting systems might have the potential and capability of providing necessary information for planning, decision making and motivating managers’ performance. Hence, this study examined the effect of the adoption of performance measures and management accounting system in enhancing the managers’ performance in Malaysian local government. The data were collected through a questionnaire survey of 131 heads of departments in Malaysian local government. A structural equation modelling technique was utilised to examine the mediating effects of performance measures and management accounting system on the relationship between budgetary participation and managerial performance through a path analysis. The findings showed that the adoption of performance measures and management accounting system had strengthened the relationship between budget participation and managerial performance. The findings pointed to the practical relevance of the performance measures and management accounting system to the current management setting of government organizations

Influence of Training, Experience, and Expertise on Quality of Financial Reporting in Dubai – Mediation of Adoption of International Public Sector Accounting Standards –IPSAS

This study aims to examine the influence of three factors that related to the individual work proficiency on the IPSAS adoption to improve the quality of financial reporting in the public sector of Dubai. The proposed conceptual framework has three independent variables; staff training, knowledge and experience, and availability of expertise; one mediating variable, IPSAS Adoption, to predict the quality of financial reporting. This study is deductive approach, and using quantitative methods. Population of the study is the accountants and internal auditors who are working in the periodic bookkeeping and financial statement reporting based on the IPSAS standards in any of the Dubai public organisations. The total possible respondents are 430 in all the 43 organisations. The target sample size is 203; however, final data size has 232 respondents. Data collection took place during June, July, and August 2022. The results revealed that the respondents’ opinion of all variables is positive agreement. Overall, two hypotheses are not accepted, related to the direct and indirect effect of knowledge and expertise on quality of financial reporting. The three variables have direct impact on the quality of financial reporting. Future studies can replicate the study in different contexts and can examine different dependent variables

Mitigating Poverty through Islamic Ideals of Administration in Nigeria: A Paradigm Shift

Reducing poverty has been plaguing the Nigerian state for time immemorial, and a quite number of policies and programs were conceived, designed and implemented to some certain degrees through the ages, however, the efforts are almost fruitless as the incidence of poverty has been rising defying all the efforts at mitigating its menace. Accordingly, this paper aims at exploring a paradigm shift in the course of addressing the scourge of poverty in Nigeria. To achieve this objective a conceptual model for poverty reduction has been proposed by the paper with a shift from the conventional mechanism or perspective to a proposed ideal Islamic conceptual model which if adhered to would ensure comprehensive prosperity in Nigeria thereby ensuring poverty reduction and overall well-being of the Nigerian populace. In the proposed conceptual model this paper envisaged the role of Islamic ideals of governance and administration in the quest for a better society free of squalor, hunger, hopelessness and despair. Consequently, relevant literature were used to develop the conceptual model and a discourse on Nigeria’s strive towards poverty reduction was carried out. Specifically, the conceptual model emphasized on amanah (trusteeship), adlah (justice), and istislah (public interest) as the mechanisms that would usherin and ensure prosperity and poverty reduction in Nigeria. Keywords: Poverty reduction, Amanah, Adlah, Istisla