Financial accounting and reporting 2

This book caters for degree students pursuing accounting and business courses at institutions of higher learning. Aligned with the framework-based teaching of International Financial Reporting Standards (IFRS) pedagogy, this comprehensive book contains 10 chapters that build on the knowledge and skills introduced in Financial Accounting and Reporting 1. It exposes students to more complex items, while exploring topics such as property, plant and equipment, inventory, intangible assets, investment property, biological assets, financial instruments, leases, deferred tax, introduction to group accounts, as well as impairment of assets. Students are guided in a systematic and progressive manner to acquire the required technical competencies in MFRS. The discussions are aptly punctuated with relevant worked examples to enhance the students’ understanding of various concepts and issues, and how these are related to the conceptual framework. They are also provided with ample review questions, application exercises and case studies to assess and reinforce their learning

Financial constraints, corporate tax avoidance and environmental, social and governance performance

Purpose: This paper aims to investigate the relationship between corporate tax avoidance and environmental, social and governance (ESG) performance and the moderating effect of financial constraints on the relationship between corporate tax avoidance and ESG performance. Design/methodology/approach: The sample consists of a global data set involving 24,259 firm-year observations from 49 countries for the years 2011–2020. Corporate ESG performance was extracted from the Thomson Reuters database. The book-tax difference model was used for measuring corporate tax avoidance, while financially constrained firms were identified using the Kaplan and Zingales (1997) index. Findings: The results show that firms with higher tax avoidance are associated with higher ESG performance, but lower ESG performance is shown for firms with higher financial constraints. The results further indicate that the positive impact of corporate tax avoidance on ESG performance becomes weaker for firms with higher financial constraints. Practical implications: The findings imply that policymakers and regulators should focus on mechanisms to promote more internal funds to assist firms in pursuing ESG-related initiatives, such as through tax incentives. Investors should understand the “smokescreen” effect of corporate tax avoidance on ESG performance, especially for firms with financial constraints. Originality/value: This analysis provides international evidence on the link between tax avoidance and ESG and considers the joint effect of pressures for internal funds, through tax and financing constraints, on corporate ESG performance

A solution towards a viable compensation mechanism for injury from COVID-19 vaccines in Malaysia: A qualitative study

Background: It has been established that the existing compensation mechanism is not the favoured platform for vaccine recipients with Adverse Effects Following Immunisation (AEFI). With the mass production of vaccines during the COVID-19 pandemic, intensified by the mandatory National COVID-19 Immunisation Programme in Malaysia, an alternative resolution mechanism for compensation is long overdue. This qualitative study aims to propose a viable alternative dispute resolution (ADR) mechanism for those who suffer AEFI from COVID-19 vaccination, particularly the economically disadvantaged, older people, and disabled individuals in Malaysia. Methods: The researchers conducted an in-depth focus group discussion in September 2022 involving seven participants representing key stakeholders in vaccine compensations from governmental agencies, non-governmental organisations (NGOs), and private institutions who were experts in litigation and legislation, consumer protection, and medical practices in Malaysia. The study utilised ATLAS.ti 22 to conduct a thematic analysis. Findings: The analysis yielded three themes: existing mechanisms and their challenges, the role of ADR, and the solution for a vaccine injury compensation mechanism. The participants shared their knowledge and experience regarding the existing vaccine compensation mechanisms in Malaysia, i.e. the common law of Tort and Consumer Protection Act 1999, and explained how each mechanism relates to specific challenges or arguments that provide the basis on which they are unable to accord fair compensation to the vaccine recipients. The participants debated the merits and disadvantages of the types of ADR for AEFI and unanimously proposed a specific healthcare centre for compensation (SHCC) as the most viable compensation mechanism for AEFI. Conclusion: SHCC offers a new ADR to serve as a compensation mechanism for claimants affected by the COVID-19 vaccines while also contributing to achieving Sustainable Development Goal 16: peace, justice, and strong institutions

Audit firm tenure and corporate tax avoidance: evidence spanning COVID-19 pandemic

Purpose: This study aims to examine the effect of audit firm tenure (AFT) on corporate tax avoidance (CTA) and the moderating effect of the COVID-19 pandemic. Design/methodology/approach: The sample comprises 41,074 firm-year observations from 32 countries from 2015 to 2020, for which data are collected from various sources: financial data from the Refinitiv database, country corporate tax rates from the Tax Foundation, and other country-level data from the World Bank database. The authors use the book tax difference to measure CTA and multiple proxies for AFT. Findings: This study finds that a longer AFT is associated with higher CTA, confirming the notion that long AFT impairs auditor independence. The findings remain robust when considering various AFT proxies, incorporating Hofstede’s cultural factors, using weighted least-squares estimation and addressing endogeneity through propensity score matching. This study also finds a non-linear relationship between extended client and auditor relationships and CTA, supporting the mandatory audit firm rotation regulation and increasing investors’ caution regarding the consequences of extended client–auditor relationships on firm behaviour. Research limitations/implications: This study offers new evidence on the effect of the COVID-19 pandemic on the link between AFT and CTA and documents a non-linear relationship between AFT, which has not been addressed in prior studies. Practical implications: The findings of this study have several significant practical implications. First, governments and policymakers gain insights into the consequences of extended auditor–client relationships, hence calling for a review of auditing and taxation regulations. Second, the findings provide important insights into the issue of auditor independence, especially during long engagements and crises such as COVID-19. Finally, investors and tax authorities should be more cautious about the risks of aggressive tax avoidance during crisis periods. Originality/value: To the best of the authors’ knowledge, this is the first study to use a global data set to investigate the effect of AFT on CTA during the COVID-19 pandemic

Corporate ESG performance, Shariah-compliant status and cash holdings

Purpose: This study aims to examine the association between environmental, social and governance (ESG) performance and cash holdings, as well as whether this association is moderated by Shariah-compliant status. The aim was to test the joint effect of two ethical precepts, namely, the ESG and Shariah-compliant status, in explaining variations in cash holdings. Design/methodology/approach: A sample set that consisted of 9,244 firm-year observations from 25 countries from 2016 to 2020 was analysed using regression analysis. Firm-level data were sourced from Thomson Reuters and Refinitiv databases, while country-level data were derived from the World Bank and Hofstede Insights websites. Findings: Firms with greater ESG performances were found to have higher cash holdings. The positive association between ESG performance and cash holdings was greater for Shariah-compliant firms compared to non-Shariah-compliant firms. In support of the stakeholder theory, the evidence indicated that Shariah-compliant firms with higher ESG commitments also have higher cash holdings as part of their corporate strategy. Practical implications: These findings provided further comprehension to investors that ESG practices among Shariah-compliant firms are essential information during investment decision-making processes. Social implications: These findings highlighted ethical corporate practices through two frameworks, namely, ESG commitment and Shariah compliance; hence, contributing towards strategies to reach the Sustainable Development Goal 16 of promoting just, peaceful and inclusive societies. Originality/value: This study has focused on the motives for cash holdings by considering the ethical precepts embodying ESG and Shariah compliance to uphold the positive impact of high cash reserves

Abstracts of the International Conference on Business, Accounting and Finance 2023: Embracing New Business Paradigm Shifts

This book presents the abstracts of the selected contributions to the second International Academic Conference 2023, held on 25-26 February 2023 by the International University of Malaya-Wales (IUMW), Kuala Lumpur, Malaysia. IAC 2023 is the coming together of researchers and industry. It’s a place to gather and share groundbreaking ideas, discoveries, and experiences on a variety of thought leadership topics covered under this year’s conference theme, “Embracing New Business Paradigm Shifts". Conference Title: International Academic Conference 2023Conference Acronym: IAC 2023Conference Theme: Embracing New Business Paradigm ShiftsConference Date: 25-26 February 2023Conference Venue: IUMW, MalaysiaConference Organizer: International University of Malaya-Wales, Kuala Lumpur, Malaysi