Corporate philanthropy disclosure: Does board’s education matters?

The study on corporate philanthropy (CP) disclosure is limited and need to be given further attention.Thus, the objective of this paper is to examine the importance of board of directors’ (BOD) education, in addition to firm-specific factors, as possible determinants of CP disclosure of Malaysian public listed companies.Three BODs’ education characteristics were considered namely the level of education, field of education and place of education.Data for the study was collected using secondary data.A CP checklist was used to measure the level of CP disclosure in the annual reports of 296 companies listed on Bursa Malaysia for the year 2013.By employing multiple regressions, the results indicated that the board’s level of education is statistically significant in explaining the disclosure of CP. The results also displayed no significant relationship between field of study, place of education and CP disclosure. It is expected that this study will have important policy implication that enhances the transparency and accountability pertaining the corporate givings

The formation of separate risk management committee and the effect on modified audit report

The aim of the paper is to examine the formation of a separate risk management committee (RMC) and its effect on the modified audit report among the non-banking and financial companies listed in Bursa Malaysia.Data was collected from the annual reports of a sample of 300 companies from 2004 until 2009.Both descriptive and multivariate analyses were employed to address the research objectives.The results indicate that a separate RMC is negatively related with the acceptance of the modified audit report.Further, the RMC’s members with independent non-executive status and members with accounting and financial background will also probably reduce the acceptance of the modified audit report.However, losses recorded for previous financial years are likely to increase the issuance of modified audit report by the auditor.The period of auditor engagement with the client and client size will also affect the modified audit report.The findings provide empirical evidence on the development and importance of a separate RMC for the modified audit report

Islamic concept of corporate social responsibility (CSR) from the perspective of CSR players at Bank Islam Malaysia Berhad

The issue of CSR has received an increasingly high profile in recent years all over the world. Most of the prior studies on CSR are based on the conventional concept, which the concept is failed to explain the religious or spiritual obligations of business entities towards the society and other stakeholders.From the Islamic perspective, the business social responsibility is broadly discussed in many Quranic verses and Hadith and covered spiritual, moral and material obligations. Thus, this study aims to describe the Islamic concept of CSR and to identify the objectives of such engagements to fulfill various stakeholders’ demands and needs.Using a case study approach, a group of CSR key players at Bank Islam Malaysia Berhad were interviewed and several series of in-field observations of CSR events were conducted as well as documentation was reviewed in order to better understand the concept.The findings of this study indicate that CSR relates to any activities in which the bank engages to discharge religious, social and economic responsibilities and account abilities to attain barakah (Allah’s blessings) and to enhance the well being of the stakeholders and the business. Hence, this study may enhance the body of knowledge of CSR from the Islamic perspective to reflect Islamic teachings, values and principles

Pension accounting disclosures and stock market reactions

The Malaysian Accounting Standard Board ‘MASB’ issued FRS 119 ‘Employee Benefits’ which became effective for periods beginning on or after 1 January 2010. This standard is further superseded by MFRS 119 (i.e. as amended by IASB in June 2011) with effect from 1 January 2013. Hence, the present study provides evidence on the practice of pension accounting disclosures after the implementation of FRS 119 ‘Employee Benefits’ and their stock market reactions ‘cumulative market adjusted return’.The study reveals that seventy (70) companies have adopted Defined Benefit (DB) pension schemes based on the annual reports for the year 2009.Among these companies, seven (7) companies have pension assets disclosures while another 63 companies pension liabilities disclosures.The pension accounting disclosures related to actuarial gains and losses are only provided by 29 Malaysian companies.In addition, multivariate analysis provides interesting results that indicate pension liabilities disclosures are significant variables in relation to CMAR.These findings may suggest that DB pension schemes with high disclosures of pension liabilities are less likely contributing to high value of CMAR.In this context, the users of corporate financial statements could be expected (1) to value the amount of pension liabilities more than amount of pension assets among DB pension schemes adopters; and (2) higher amount of pension liabilities may result in lower CMAR among DB pension schemes adopters in Malaysia.On the other hand, pension assets disclosures which are positively and significantly associated to CMAR indicate that the higher of pension assets disclosed in by DB pension adopters in the financial statements, the higher of CMAR will be offered by Malaysian listed companies.These disclosures of pension asset could help the aging population in planning the retirement needs in the future.In addition, users of financial statements may be worth to be attentive and watchful in relation to the amount of pension assets which are disclosed in the annual reports in order to make decision on buying and selling of company securities

An examination on audit tenure, auditor size, independence of audit committee and the issuance of going concern opinion

The issue of audit tenure has been discussed since four decades age. Nowadays, due to the recent corporate scandals in United States, the issue is discussed together with auditor independence that led to companies’ demise. Mandatory audit rotation debates come from the arguments that long audit tenure would create costly relationship between auditors and clients and thus would lead to audit failure such as in the case of bankruptcy. Therefore, this study attempts to investigate the situation in Malaysia whereby no empirical study using archival data has been done. Specifically, the current study examines the impact of audit tenure on the issuance of going concern opinion. The result shows that the variable of audit tenure is positively significant in determining going concern opinion. Our findings also pointed that if a client never changed its auditor since listing, there is a tendency to issue a clean opinion though the client suffers apparent financial problems. Therefore, it can be said that, “auditor change would do well, but forcing an unrealistic auditor rotation might not yield what it hopes for”. For the benefit of auditing profession, we echo the importance of self-regulation and Laissez-faire practice in Malaysia as a better alternative than a mandatory auditor rotation. Besides, the results show no significant impact of Big five audit firms and independence of audit committee on auditor going concern opinion. Further sensitivity analyses show that the results are robust to different measurements

The effect of audit firm tenure and audit firm switching on auditor reporting quality: The case of going concern opinion

The issue of audit tenure has been discussed since four decades age. Nowadays, due to the recent corporate scandals in the United States, the issue is discussed together with auditor independence that led to companies’ demise. Mandatory audit rotation debates come from the arguments that long audit tenure would create cosy relationship between auditors and clients and thus would lead to audit reporting failure such as in the case of bankruptcy. Therefore, this study attempts to investigate the situation in Malaysia whereby no empirical study using archival data has been done Specifically, the current study examines the impact of audit tenure on the issuance of going concern opinion. The result shows that audit firm tenure is positively significant in determining going concern opinion. Our findings also pointed that if a client never changed its auditor since listing, there is a tendency to issue a clean opinion though the client suffers apparent financial problems. Therefore, it can be said that, “auditor change would do well, but forcing an unrealistic auditor rotation might not yield what it hopes for”. For the benefit of auditing profession, we echo the importance of self-regulation and Laissez-faire practice in Malaysia as a better alternative than a mandatory auditor rotation. Further sensitivity analyses show that the results are robust to different measurements

Laissez-faire or mandatory auditor rotation: The case of audit firm tenure and audit firm switching

The issue of audit tenure has been discussed since four decades age. Nowadays, due to the recent corporate scandals in the United States, the issue is discussed together with auditor independence that led to companies’ demise. Therefore, this study attempts to investigate the situation in Malaysia whereby no empirical study using archival data has been done. There are two major findings. First, the variable of audit firm tenure is positively significant relationship with going concern opinion. Second, when a client never changes its auditor since became a public listed company; there is a tendency to issue a clean opinion though the client suffers apparent financial problems. This implies that, “auditor change would do well, but forcing an unrealistic auditor rotation might not yield what it hopes for”. Therefore, we echo the importance of self-regulation and Laissez-faire practice in Malaysia as a better alternative than a mandatory auditor rotation

Corporate performance, corporate governance and CEO dismissal in Malaysia

Objective – This study empirically examines the incidence of CEO dismissal in Malaysian Public Listed Companies (PLCs). Methodology/Technique – Logistic regression is used in this study to estimate the relationship between firm performance, corporate governance and CEO. Findings – Using 44 CEO turnover firms in 2010 among financial and non- financial institution, this study find that the firm performance, board multiple directorship, family ownership and institutional investors influence CEO dismissal. Specifically, firms that have lower performance, have a high proportion of board member multiple directorships and controlled by institutional investors are more likely to dismiss their CEOs. These results imply that poor performance together with board multiple directorship and controlled by large institutional investors are amongst major factor that contribute to CEO dismissal. In contrast, we find CEO dismissal is less likely occurred at firms that controlled by the family.This result may due to large control by family and in some cases the CEOs are among family members. Novelty – This paper study on the type of CEO turnover which segregate the type of turnover into forced and voluntary turnover. This research idea has limited finding globally as previous research on CEO turnover do not separate between forced and voluntary turnover Type of Paper: Empirica

The effect of fundamental determinants on voluntary disclosure of financial and nonfinancial information: the case of Internet reporting on the Tehran Stock Exchange

The recent tendency of businesses toward voluntary disclosure has improved the quality of financial reporting. High-quality financial reporting helps users of financial information trust the business, and thus creates value for the business.Also, during the last decade there has been a profound revolution in information technology as a result of the Internet, and obviously accounting has been directly affected by this change.The present study divides voluntary disclosure into two groups of financial and non-financial information and investigates the effects of fundamentals on voluntary disclosure by businesses.The population is composed of 65 companies listed on the Tehran Stock Exchange from 2005 to 2012. The hypothesis testing results show that firm size, business complexity, earnings volatility, and firm value had a significant and positive impact on voluntary disclosure, whereas financial leverage had a significant and negative impact on voluntary disclosure, while no relationship was observed between voluntary disclosure and financial performance