Decision Usefulness of Financial Information: the Role of Audit and Ifrs

We examine the usefulness of financial information given different circumstances, pre and post- International Financial Reporting Standards (IFRS) adoption and audit quality. The usefulness of information is deduced from the association between information quality and investment efficiency. IFRS is said to promote more informative financial information and hence should increase the decision usefulness of the reported information. In practice, auditors are the center of reference in the preparation of financial report and empirical evidence shows that quality audit enhances the credibility of reported information. This study aims to examine and compare the roles of IFRS and audit quality in the association between financial information quality and investment efficiency. The results from a sample of 558 firms provide support that financial information quality is significantly related to investment efficiency indicating decision usefulness of reported information. However, despite the contention that IFRS leads to a more informative financial report, the results show that IFRS does not strengthen the relationship between information quality and investment efficiency. The result for audit quality, on the other hand, is significant indicating that reported information is more useful to decision-makers when it is audited by the quality audit firm

Analyst forecast accuracy and earnings management

This paper investigates the reciprocal or endogenous relationship between earnings management and analyst forecast accuracy. Earnings number is one of the most referred information especially in relation to investment decision-making. Financial analysts use earnings number and its trend in coming up with their forecast. The quality of earnings reported hence may affect the accuracy of forecast made by analysts. Quality of reported earnings is often indicated by earnings management. One of the motivations to manage earnings is to meet or beat analyst forecasts. If analysts failed to account for earnings management, it is possible that earnings manipulation in the previous year may mislead analysts and affect forecast accuracy for current and/or future years. Thus, relationship between earnings management and forecast accuracy could be endogenous or reciprocal, where managers react upon analysts’ forecasts and analysts use reported earnings to make forecast. Previous research on this area assume earnings management and forecast accuracy as exogenous variables. This study on the other hand incorporates the reciprocal relationship between analyst forecast accuracy and earnings management in examining whether analysts can detect earnings management. The relationship between earnings management and analyst forecast accuracy of 110 firms listed on Main board of Bursa Malaysia from 2007 to 2012 is analyzed using dynamic panel system Generalized Method of Moments (GMM) estimator. The year 2007 to 2012 is chosen because this represents the period of convergence from MASB to MFRS. Result indicates that meeting or beating the forecast is one of the incentives for earnings management although not a strong incentive. On the other hand, earnings management significantly influence forecast accuracy, indicating that somehow, analysts trust the reported earnings. This study adds to the literature by addressing the possible endogenous and dynamic relationship between earnings management and analyst forecast accuracy

Financial Information Quality And Investment Efficiency: Evidence From Malaysia

This study aims to empirically examine the association between financial information quality and investment efficiency among firms in Malaysia. Sample of this study consists of 558 firms listed on the Main Board of Bursa Malaysia from the year of 2001 until 2011. The investment efficiency is measured based on firms’ deviations from the expected investment level. The financial information quality is measured based on four different measurement schemes. The results provide support that financial information quality is significantly positively related to investment efficiency. The inclusion of several firm level control variables and use of alternative models to measure investment efficiency provides consistent findings. The results of this study provide further understanding and empirical evidence relevant to quality of financial information and investment efficiency. As most of the extant studies on this association have been done on data from the US and advanced countries, this study fills the gap in literature by investigating the impact of financial information quality on investment efficiency in an emerging market. Although emerging markets make up the vast majority of economic activity around the world, they have received limited attention in academic research. Findings of this study could be of interest to the international organisations such as World Bank whose missions are to aid countries with developing and transitional economy, and improve living conditions of their citizens

Value relevance of Other Comprehensive income and its Available-For-Sale Financial Instruments (AFS) and Revaluation Surplus of Property, Plant and Equipment (REV) components

Studies on value relevance of Other Comprehensive Income (OCI) have thus far provided mixed evidences. Prior studies also found that fair value reporting has a significant impact on the value relevance of OCI. However, most studies on value relevance of OCI focused on developed countries where the capital market is more efficient. In these settings due to the existence of active market, fair valuation of assets may not pose a major problem. Therefore, more studies are needed to better understand the value relevance of such OCI especially in developing countries which have less efficient market. Thus, this study examined whether OCI and its components, Available-For-Sale Financial Instruments (AFS) andRevaluation Surplus of Property, Plant and Equipment (REV) are value relevant in Malaysia as a developing country. In order to fulfill these objectives, this study hypothesized that OCI and its components are associated with share price. These hypotheses were empirically tested using a sample of 1,419 firm years observations from 2011 to 2013, of firms listed on the Main Market of Bursa Malaysia. The results of Panel Analysis indicates that OCI and its components are value relevant. These results remain robust after additional analyses. This study provides additional evidence of value relevance of other comprehensive income in a developing country. The results indicate that the move towards a more comprehensive income reporting through the preparation of the Statement of Comprehensive Income results in more informative financial reporting

Board characteristics, investors’ confidence and firm value : Malaysian evidence

This study aims to investigate the association between board characteristics and firm value taking into consideration the role of investors’ confidence. The subject of corporate governance is still of interest to researchers and practitioners due to its importance and the complexities surrounding it. This is because there are many elements that may interplay with corporate governance in influencing the value of firms. Despite abundance of research on the effect of board characteristics on firm’s value, the empirical evidences are still inconclusive. One of the consequences of having good governance as evidenced by many empirical research is the higher firm value. The agency theory explains this relationship such that good governance reduces agency cost, increasing investors’ confidence on the firm, hence its value. This explanation indicates that the influence of good governance on the firm’s value could be due to its effect on investors’ confidence. This study extends the understanding on the relationship between corporate governance and firm value by investigating the role of investors’ confidence on this relationship. Companies listed on Main Board of Bursa Malaysia are selected as sample using proportionate stratified random sampling method. The results demonstrate that CEO duality and board independence significantly related to firm value consistent with prior studies. The analysis on the role of investors’ confidence in the relationship between board characteristics and firm value indicates that investors’ confidence plays significant role in the relationship between CEO duality and firm value. The results provide input to firms on factors that contribute to firm value and to relevant authority on the important aspect of corporate governance

Overcoming talent shortage through impact sourcing

The purpose of this study is to understand the use of impact sourcing strategy to overcome talent shortage issues in global business services (GBS) firms located in Malaysia and Sri Lanka. These countries were selected because of their potential development in impact sourcing. This study uses qualitative research approach with two selected case studies of GBS firms with impact sourcing operations. The selected GBS firms involved in impact sourcing of their finance and accounting processes to marginalized communities in Malaysia and Sri Lanka. Findings show that the impact sourcing is used as a strategy to overcome talent shortage issues faced by GBS firms. At the same time, it contributes to income generation with world class work experiences among the marginalized communities. Practically, this opportunities are better gained with high firm’s readiness towards working closely with the marginalized communities in mitigating the talent shortage issues. Theoretically, this study provides empirical evidence of global talent management in the context of impact sourcing in GBS firms. It further contributes to the literatures in impact sourcing of accounting activities in Malaysia and Sri Lanka that reach out young talents from marginalized communities at the universities and those in the rural areas

Physical properties of undisturbed tropical peat soil at Pekan District, Pahang, West Malaysia

Peat soil are considered soft soil with having weak characteristics such as low shear strength, high moisture content, and compressibility. Construction perspective, peat soil is considered as unstable soil due to its poor engineering properties. It may cause an extensive loss in road or building construction projects. The key objectives of the current study are to examine the physical properties of peat soil including shear strength, liquid limit, moisture content, organic content, pH, and dry density of peat soil in Pekan district. The peat samples were collected from Kampung Bahru (KB), Kampung Lancing I (KLI), and Kampung Lancing II (KL II), Pekan District, Pahang, Malaysia. The finding indicates that the shear strength (kPa) for was measured in between 7.2 to 8.2 kPa. The water content was recorded 537.10 % to 635.28 %. The liquid limit was examined 137.638% to 152.540 %, the maximum dry density was examined 6.68 x 10-7 kg/cm3 to 7.99 x 10-7 kg/cm3. The average organic content was calculated as approximately 95.88 % to 98.48 %. In comparison with previous study, its indicated that the investigated peat soil in Pekan area is mainly content with lower shear strength, high water content, liquid limit, and low density, resulting in low strengthening properties. Based on the examined physical properties, its specified that peat did not have adequate stability as a road or building foundation. Strengthen of peat are highly recommended for any types of construction on peatland in Pekan district, Pahang, Malaysia

Talent pool for Global Business Services: industry-academia collaboration

In the rapid development of Global Business Services (GBS) industry, there is a need to nurture quality and capable talent pool. One of the efforts is through industry-academia collaboration in offering of GBS course at the university. Universiti Kebangsaan Malaysia (UKM) together with TalentCorp and Malaysia Digital Economy Corporation (MDEC) collaborativelydeveloped the first GBS course in Asia. The course consists of three days of intensive seminar and ten weeks of case study project. Both seminar and case study project require direct interaction with GBS firms. The purpose of this paper is to assess the challenges of offering the GBS course faced by its stakeholders. Based on data gathered through survey and roundtable discussions, this paper presents challenges in delivering the course content and achieving the course objectives. Findings suggest that the main challenges are commitment, time management and students’ preparation. Despite these challenges, the course has direct impacts on the stakeholders as the GBS course heightens awareness on GBS industry among future graduates and helps increase their employability in the industry

Growth kinetic and composition of the interfacial layer for RF sputtering Al2O3 layer on germanium

Purpose – The quality of GeOx–Ge interface and the equivalent oxide thickness (EOT) are the main issues in fabricating high-k/Ge gate stack due to the low-k of GeOx interfacial layer (IL). Therefore, a precise study of the formation of GeOx IL and its contribution to EOT is of utmost importance. In this study, the GeOx ILs were formed through post-oxidation annealing of sputtered Al2O3 on the Ge substrate. The purpose of this paper is to report on growth kinetics and composition of IL between Al2O3 and Ge for HCl- and HF-last Ge surface. Design/methodology/approach – After wet chemical cleaning with HCl or HF, Al2O3 was grown onto the Ge surface by RF sputtering. Thickness and composition of IL formed after post-anneal deposition at 400°C in dry oxygen ambience were evaluated as a function of deposition time by FESEM and characterized by X-ray photoelectron spectroscopy, respectively. Findings – It was observed that the composition and thickness of IL were dependent on the starting surface and an aluminum germinate-like composition was formed during RF sputtering for both HF- and HCl-last starting surface. Originality/value – The novelty of this work is to investigate the starting surface of Ge to IL growth between Al2O3/Ge that will lead to the improvement in Ge metal insulator field effect transistors (MISFETs) applicatio

Effects of Post-Deposition Annealing Temperatures on the Composition of Interfacial Layer at Germanium (Ge) /Aluminium Oxide (Al2 O3 ) (Kesan Suhu Penyepuhlindapan Pasca Pemendapan ke atas Komposisi Antara Muka Lapisan Oksida Germanium (Ge)/Aluminium (Al2 O3 ))

The understanding of chemical bonding structure of high k dielectrics/Germanium (Ge) interface is upmost importance in order to form a good quality dielectric/Ge interface in fabricating Ge metal oxide semiconductor field effect transistor (MOSFETs). In addition, there is still no detail explanation on the interfacial growth of dielectrics/Ge under the influenced of different temperature of post deposition anneal. In current work, the effects of post deposition anneal (PDA) temperature between 400°C and 600°C on the chemical composition of interfacial layer between Ge and Al2 O3 were examined by X-ray photoelectron spectroscopy (XPS). Investigation on thermal stability and structural characteristics for gate structure of Al2 O3 dielectric grown on Ge by RF sputtering was done by analyzing X-ray photoelectron spectroscopy (XPS) spectra. It is observed that the oxygen deficient region in interfacial layer (IL) is enhanced rather than fully oxidized Al2 O3 with increased PDA temperatures. These undesired phenomena caused shrinkage of IL at Ge/Al2 O3 interface at higher temperature of 600°C