An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia

Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs following the transformation program. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency of meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As of 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data that resulted in the total number of firm-year observations to 120 for six years (years 2003-2009).  Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. Agency theory was applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. The study is important as it provides additional knowledge about the impact of audit committees effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committees effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession.    

Audit committee's effectiveness and financial reporting quality: the case of GLCs in Malaysia

Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As at 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data which resulted in the total number of firm-year observations to become 120 for six years (year 2003-2009). Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. However, no evidence was found to support the effect of audit committee size, meetings and expertise on the magnitude of earnings management. Agency theory and resource dependence theory were applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. However, contrary to expectation, the theories were not fully supported hence there is a need for other alternative theory that can explained the relationship in positive manner. This study is different from prior studies, in that it makes a significant contribution towards enhancing one’s knowledge in the interacting role of audit committee’s effectiveness and financial reporting quality subsequent to the transformation program in GLCs. The study is important as it provides additional knowledge about the impact of audit committee’s effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committee’s effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession

Influence of whistle blowing on unethical behaviour in Jabatan Kastam Diraja Malaysia (JKDM) / Azman Rafie Abdul Rahman, Mohd Adha Ibrahim and Nurul Nazlia Jamil

This paper is to investigate the relationship between whistle-blowing practice and unethical behavior at the Royal Malaysian Customs Department in Putrajaya which represent the Royal Customs Department’s organizations in general. The study was also conducted to determine whether whistle-blowing practice would influence the efforts to reduce unethical behavior among Jabatan Kastam Diraja Malaysia (JKDM) officers and members. Other than that, this study was also identified the level of unethical behavior and the whistle blowing practice of the organizations among the officers and members of the JKDM Putrajaya. A total of 300 questionnaire were distributed, only 182 questionnaires were quoted for the analysis. Data were analysed using the SPSS software. The findings show that, the level of unethical behaviour among officers and members of JKDM is low. The whistle-blowing practice is at a high level in accordance with the perception of officers and members of JKDM Putrajaya. Whistle-blowing policies that have been studied, have insignificant value with the unethical behaviour compare to the whistle blowing practices, that have a significant value and the value is moderate. In the multiple regression analysis showed, only the whistle-blowing practice has a significant value on the ethical behavior. Hence, the management, policy maker and JKDM leaders should pay attention to the seriousness of the distribution mechanism or whistle-blowing as one of the efforts to combat the unethical behavior among officers and JKDM members

Millennial grits on professional accounting profession: Malaysia’s setting / Mohd Adha Ibrahim, Nurul Nazlia Jamil and Mohamad Yazis Ali Basah

The purpose of this paper is to study how the accounting students grit level would affect their intention to become professional accountant. The research was conducted using a questionnaire survey structured with two independent variables namely consistency of interest and perseverance of effort and translated into 17 statements which was then distributed to accounting students at four different universities around Klang Valley. In total, 153 usable responses were received. The analysis show that all predictor variables explain about 6.5 percent of the variability of students’ intention to become professional accountant. Further analysis also shows that one independent variable namely perseverance of effort has direct significant relationship with a student’s intention to become professional accountant

THE INFLUENCE OF SPIRITUAL INTELLIGENCE, SPIRITUAL CONGRUENCE AND ACCOUNTING LITERACY ON ATTITUDE OF PURCHASING HALAL PRODUCT TOWARDS INTENTION TO PURCHASE AMONG GENERATION ALPHA

Background and Purpose: In recent years, studies and interest in human behaviour in relation to the halal industry have been growing. The process of understanding the reasons for planning behaviour intention is not an easy path. Intentions are provoked by an individual’s attitude which effect on how individuals making per purchase decision (Blackwell, Miniard, & Engel, 2001; Viksne, Salkovska, Gaitniece, & Puke, 2016). Human beings are complex and this complexity helps in having contradictions in an individual’s attitude.   Theory Planned Behavior (TPB) was created based on the theory of social psychology, and congruity theory was used as a theoretical framework for creating the current conceptual model.   The main objective of the study is to examine the relationship between Spiritual intelligence (SQ), Spiritual Congruence (SC) and Accounting Literacy (AL) towards attitude and intention to purchase Halal product among the Generation Alpha. Methodology: To provide insight from this generation, the current study conducted a survey within the students of Faculty Economics and Muamalat, USIM for five programs offered. The survey reached 181 respondents, those who had experience in consuming halal products. The research instrument which consists of 31 scale items were utilized using a Likert scale and were then administered via questionnaire administered approach of using SPSS.   Findings: Based on the finding it indicates that only SQ and SC have positive and significant relationship towards attitude which is represented by 0.006 for SQ and 0.022 for SC. However, AL does not reflect significant relationship with attitude.   Contributions: The implication of the finding indicates that the education structure which embedded the Islamic elements could influence the attitude of the students towards Halal products. The finding could be the interest of the authorities and bodies related to Halal industry to create awareness among Alpha generation.   Keywords: Spiritual intelligence, spiritual congruence, accounting literacy, halal, generation alpha.   Cite as:  Azreen Jihan, M. H., Nurul Nazlia, J., Muhamad Azrin, N., Muhammad, M., & N Alia Fahada, W. A. R. (2023). The influence of spiritual intelligence, spiritual congruence and accounting literacy on attitude of purchasing halal product towards generation alpha. Journal of Nusantara Studies, 8(2), 73-94. http://dx.doi.org/10.24200/jonus.vol8iss2pp73-9

An investigation on the audit committee’s effectiveness: the case for GLCs in Malaysia

Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As at 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data which resulted in the total number of firm-year observations to 120 for six years (year 2003-2009). Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. However, no evidence was found to support the effect of audit committee size, meetings and expertise on the magnitude of earnings management. Agency theory and resource dependence theory were applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. However, contrary to expectation, the theories were not fully supported hence there is a need for alternative theory that can explained the relationship further. This study is different from prior studies, in that it makes a significant contribution towards enhancing one’s knowledge in the interacting role of audit committee’s effectiveness and financial reporting quality subsequent to the transformation program in GLCs. The study is important as it provides additional knowledge about the impact of audit committee’s effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committee’s effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession

Audit committees and financial reporting quality following the government transformation program: evidence from Malaysia

The main objective of this study is to investigate the impact of Green Book’s implementation through Government Transformation programme in improving financial reporting quality among Malaysian GLCs. Results show an agitation finding whereby no evidence was found to support the hypotheses. Nevertheless, results were significant on the year when transformations were made. Agency theory and resource dependence theory presented as the theory used to explain audit committee, as a monitoring mechanism and reduce the agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality.However, much to my keenness,the theories were not supported hence delineating other alternative theories in gaining further understanding the relationship between audit committee and financial reporting quality. The introduction of the Green Book to strengthen the board’s effectiveness had shown otherwise. Consequently, provide some room for improvement for future research to collaborate other theoretical explanation that could explain these findings

An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia

Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs following the transformation program. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency of meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As of 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data that resulted in the total number of firm-year observations to 120 for six years (years 2003-2009). Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. However, no evidence was found to support the effect of audit committee size, meetings and expertise on the magnitude of earnings management. Agency theory was applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. However, contrary to expectation, the theory was not fully supported hence there is a need for an alternative theory that can explain the relationship further. This study is different from prior studies, in that it makes a significant contribution towards enhancing one’s knowledge in the interacting role of audit committees effectiveness and financial reporting quality subsequent to the transformation program in GLCs. The study is important as it provides additional knowledge about the impact of audit committees effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committees effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession

The Impact of Internal Control System on the Accountability Practices in Waqf Institutions: Evidence from Al Rahma International Waqf

The internal control systems have several mechanisms applied to discharge the accountability through ensuring and assessing the organizational financial regulatory compliance process. This study aims at examining the impact of internal control systems’ components on enhancing the accountability in Al Rahma International Waqf Institution. The sample comprises of 152 employees at the managerial level in Al Rahma International. A questionnaire survey used in the data gathering in which all the data collected at the same time from the respondents. The grouping and analyses of the questionnaire’s respondents were conducted using exploratory factor analysis and multiple regression analysis in SPSS statistical tools and Maximum Likelihood Estimator (MLE) approach for data analyse. The findings show the regression analysis of both enter and stepwise method that the monitoring internal control (ICM) has a significant impact on the performance accountability practices. The analysis and findings of the data collected through this research should be of great interest to Al Rahma International and their donors. Several suggestions are highlighted for improvement based on the founded results. Several suggestions will be highlighted for improvement based on the founded results. Keywords: internal control systems, accountability practices, Waqf Institution DOI: 10.7176/RJFA/12-16-04 Publication date:August 31st 202