Brainstorming and auditor education background on internal control: Assessing fraud opportunity

Various efforts have introduced to the government auditors in improving the fraud risk assessment performance and at the same time enhancing audit quality as well as increasing public confidence. The provision of standards and guidelines have encouraged the government auditors to perform a brainstorming during the preliminary analysis of a fraud risk assessment.Due to the diversity of the government auditors education backgrounds, brainstorming improve a performance of internal control review by government auditor.The inability of the government auditor to detect any misstatement, especially fraud risk may expose auditors to lawsuits which consequently lead to a bad reputation to the public.The purpose of this study is to examine the direct and interaction effects of the brainstorming and education background against an internal control review performance. The 2 X 2 factorial designs were employed and a total of 151 government auditors participated in this study.The government auditors were assigned to assess the internal control based on individual or in groups.The results show that brainstorming and education background impact the internal control review performance.The results also show a significant interaction between brainstorming and education background.The findings in this study provide insights into the importance of brainstorming for government auditors with various education backgrounds

The Enforcement Role Of The Companies Commission Of Malaysia

This paper explores the role of the enforcement efforts undertaken by the Companies Commission of Malaysia (CCM) as a regulator of the Companies Act of 1965, which is entrusted to uphold and ensure good practices of corporate governance among Malaysian companies.  The paper attempts to provide an understanding on various enforcement actions in terms of the effectiveness and adequacy of the measures adopted by the CCM in promoting and improving the level of corporate governance practices in Malaysia.  CCM has adopted the Balanced Enforcement Approach to promote effective corporate governance practices among the Malaysian companies. An increasing compliance rate and greater corporate governance awareness at a level similar to other countries indicates at least aminimum success of the Balanced Enforcement Approach.  Indicated is the need for CCM to establish a benchmarking or ranking procedure in order to determine the level of corporate governance practices among companies in Malaysia

Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia

Small- and medium-sized enterprises (SMEs) do not gain sufficient economic returns despite their significant economic contributions. A possible cause of poor SME performance is weak corporate governance. However, the corporate governance of SMEs is rarely investigated. Ownership structure provides SMEs with a monitoring mechanism that enhances performance. This study examines the relationships between board characteristics (including size, composition boards, CEO duality, expertise, and ethnicity) and SME performance in Malaysia. This study also explores how such relationships can be moderated by monitoring ownership structure. Survey results on SMEs in Klang Valley and Selangor areas show that non-executive boards and CEO duality are significantly and positively related to firm performance. In comparison, management ownership is significantly and negatively related to performance. Board size, expertise, ethnicity, and family ownership are not significantly related to SME performance. Findings indicate that good corporate governance improves decision making and firm performance. Furthermore, agency theory can explain conflict of interest in SMEs and the importance of corporate governance in enhancing their performance

Malaysian code of corporate governance and tax compliance: evidence from Malaysia / Mohd Taufik Mohd Suffian ... [et al.]

In many countries, most of the government relies heavily on tax revenue to finance the government expenditures. In Malaysia, 78.8% of the source of revenue is from tax revenue and mainly contributed by the corporate income tax. The past literature has documented that good corporate governance could increase the firm's performances as well as tax compliance. Malaysia has published its own code of corporate governance in March 2000 and was revised in 2007, 2011 and 2012. Recently, in April 2016, the Security Commission released the recommended MCCG 2016. Thus, judging from the importance of maintaining tax collection, this paper aims to examine the importance of corporate governance in ensuring tax compliance among public listed companies in Malaysia. This study finds that corporate governance does influence tax compliance and multiple directorships is the most significant in influencing tax compliance

INTEGRATED ANTI-MONEY LAUNDERING INITIATIVES IN THE MALAYSIAN BANKING INDUSTRY TOWARDS FATF FULL-COMPLIANT STATUS

Background and Purpose: This study aims to demonstrate the integrated anti-money laundering (AML) initiatives in the Malaysian banking industry, with particular focus towards achieving the Financial Action Task Force (FATF) full-compliant status.   Methodology: This study adopts a qualitative approach, which includes reviews and analysis of secondary data in relevant literature and documents relating to money laundering risk in the Malaysian banking industry.   Findings: The integrated AML initiatives combine domestic and international efforts, which are anchored by the Malaysian Central Bank and FATF, respectively. Malaysia has been proactively abiding by the FATF requirements, and affirmative progression can be seen from the improved FATF-compliant status throughout the years.   Conclusion and Contributions: This study adds new knowledge to the existing literature by integrating domestic and international AML efforts. Achieving a FATF full-compliant status is not impossible for Malaysia with the current integrated AML initiatives in place, and this forms a strong pillar that could protect the Malaysian banking industry from money laundering risk. Keywords: Money laundering, AML, risk, banking industry, Malaysia.   Cite as: Mat Isa, Y., Hoque, M. N., Mohd Sanusi, Z., & Haniff, M. N. (2023). Integrated anti-money laundering initiatives in the Malaysian banking industry towards FATF full-compliant status. Journal of Nusantara Studies, 8(1), 117-139. http://dx.doi.org/10.24200/jonus.vol8iss1pp117-13

Effect of Brainstorming and Expertise on Fraud Risk Assessment

The purpose of this study is to examine the direct and interaction effects of brainstorming and auditors' expertise on fraud risk assessment. This study is motivated by the need to improve the government auditors' performance while maintaining high audit quality and increasing public confidence. The inability of the government auditors to detect a misstatement, particularly on the fraud risk may expose auditors to lawsuits which consequently lead to their bad reputation to the public. A 2 X 2 factorial design was employed using 151 government auditors as participants in this study. The results show that brainstorming and auditors' expertise impact the performance of the government auditors on fraud risk assessment. The results also show a significant interaction between brainstorming and auditors' expertise on the government auditors on fraud risk assessment. The findings of this study provide insights on the importance of brainstorming for government auditors with diverse expertise. Keywords: Fraud Risk Assessment, Tests of Controls, Brainstorming, and Auditor' Expertise JEL Classifications: M4, G3, H

Ideation in industrial design context: the importance of group process in brainstorming / Amer Shakir Zainol … [et al.]

Brainstorming is a series of procedures (rules) designed to maximize the productivity of groups engaged in idea generation by reducing production loss, popularized by Osborn, an advertising executive. The main concern in this tool is increasing creativity in an organization. This study examines two main factors, production loss and ownership of the topic that influence the performance in group brainstorming. Production loss includes activities in production blocking, social loafing and evaluation apprehension among individuals, while ownership of the topic relates to the interest of individuals in engaging the brainstorming activities especially in industrial design. Using a quasi-experimental research design, this study reports on the participation of115 groups of university students from 6 different universities. The data is analyzed at group-level. The hypotheses of this study are tested using Partial Least Squares (PLS) regression. Results reveal that out of the three dimensions of production loss, production blocking, social loafing, and evaluation apprehension, production blocking is negatively related to the group brainstorming performance whereas evaluation apprehension is positively related to the performance or group brainstorming. As expected, ownership or the topic is related to the performance too. However, social loafing is not related to the performance or group brainstorming. The results are of potential interest to educators, and researchers. This study responds 10 a call for further brainstorming research

The management motives in analysing accounting misstatements of Malaysian public listed companies (PLCs)

This paper discusses issues concerning management motives and situational pressures that lead to financial reporting misstatements.The situational pressures and management motives are measured using financial distress, family ownership, founders on board and earnings management of Malaysian public listed firms (referred to as PLCs) that influence the occurrence of accounting misstatements.Results show that founder on board (FOUNDER) is positively significant while family ownership (FAMOWN) is negatively significant determinants of the accounting misstatement proxy financial statement restatements.Two other variables namely financial distress (DISTRESS) and earnings management (EM) interact significantly and positively to affect accounting misstatements. Additionally, family ownership interacts with EM to positively affect accounting misstatements. Findings reveal that the extent of earnings management and financial distress and family-ownership of affect the likelihood of financial statement restatements by Malaysian PLCs

Contingencies influencing management accounting practice: a Yemen-based empirical study / Ahmed Abdullah Saad Al-Dhubaibi … [et al.]

A significant number of management accounting studies have observed various levels of management accounting practice (MAP) adoption. Although academicians and practitioners have argued that advanced MAPs create value and improve the performance of their adopters, researchers have determined that traditional MAPs remain dominant in the market. This study aims to contribute to the extant body of knowledge on this topic by exploring the level of MAP adoption in Yemen and by examining the effect of certain external (environmental) and internal (organisational) factors on the level of MAP advancement. The sample firms include large firms that operate in various economic sectors in Yemen, such as manufacturing, financial, natural resources extraction and service, as well as medium and small firms to achieve sufficient sample size. The International Federation of Accountants (IFAC) framework on management accounting stages is used to classify the levels of MAP advancement. Competition level and structure type (level of delegation) significantly explain the variations in MAP advancement levels among firms in Yemen. A higher degree of competition and amount of delegations can drive firms to adopt more sophisticated MAPs. These results improve our understanding of why some firms invest in upgrading their management accounting systems and target best practices, whereas other firms tend to continue using traditional MA tools

Comparative Judgment of Novice and Expert on Internal Control Tasks: Assessment on Work Effort and Ethical Orientation

AbstractAuditors’ judgment performances are being questioned and the public has become less trusting on profession's ability and willingness in protecting the interests of investor and stakeholders. There are three objectives addressed in this study with the first two objectives is to analyze the relationship between effort and personal ethical orientation on audit judgment performance. The third objective is to examine the differences in the audit judgment performance between audit trainees and auditors. A research instrument was developed and included a set of audit case and Forsyth's (1980) Ethics Position Questionnaire. The results show that there is a significant relationship between the respondent's effort and audit judgment performance