The impact of the key audit matters (KAMS) disclosures on investor’s decision making / Norazura Masdor and Amanuddin Shamsuddin

In 2015, Malaysia implemented the ISA701 - Communicating Key Audit Matters (KAMs) in the Independent Auditor’s Report to the Malaysian Public Listed Companies (PLCs). The Standard was first observed for audits of financial statements for financial periods ending on or after Dec 15, 2016. Thus, this paper examined the impact of KAMs disclosure on investors’ decision-making. This study explored whether this new requirement is associated with an increase in the investors’ decision usefulness based on the auditor’s report. This study employed critical content analysis on the samples that consisted of 337 PLCs in Bursa Malaysia for the year ended December 2016. Share prices were used as dependent variables to represent investors’ responsiveness when KAMs disclosed in audit reports. The share prices cover three periods of analysis; average seven days before event date (audit report date), at event date, and average seven days after event date. Independent variables include KAMs and control variables are profitability, leverage and size. Findings from the study suggest that the mandating of KAM’s disclosure has no informational value to the investors of Malaysian PLCs. Nevertheless, the paper did not offer a comprehensive analysis of KAMs issues; rather it focused on the impact of KAMs disclosure on investors’ reaction on the first year of implementation. However, the paper encourages reflections on contemporary practices and offers some suggestions for reform in the near future

Factors influencing audit report lag in Malaysian public listed companies / Amanuddin Shamsuddin...[et al.]

Timeliness of audited financial statement significantly influenced by the length of the audit process. The purposes of this study is to identify the level of audit report lag (ARL) in Malaysian public listed companies and to investigate the factors that influencing ARL in Malaysia. This study extends the previous studies by using the sample of 725 public listed companies in Bursa Malaysia for the year 2017. Secondary data from the companies’ annual reports were used in this study. The results show that 97.7% (708 out of 725) of public listed companies complied with Bursa Malaysia requirements to have audited financial statement prepared within 4 months; hence on 17 (2.3%) companies did not comply. Meanwhile, the average number of days taken by companies to issue their audited financial statement is between 95 to 96 days. The results also indicate that there are significant relationship between audit tenure, audit firm reputation and ARL. However, there is no significant association between type of industry and ARL. Findings from this study would contribute to practitioners and relevant regulatory bodies such as Bursa Malaysia, Malaysian Institute of Accountants in ensuring that ARL can be reduced or minimized

Moral Obligation and Punishment Alert: An Empirical Study of Accounting Undergraduate Behavior When Personal Interest Is Involved

As a result too many major accounting failures, critics of accounting are likely to interpret this failure as a clear signal of the inability of the profession to maintain their discipline. An extensive research investigating ethical behaviour among practicing and prospective accountants and auditors has been made. This includes studies on accounting undergraduate as it is necessary to ensure they are on the right track to meet the business world. The purpose of this study is to investigate the effect of three variables, desire of outcome, punishment alert and moral obligation, on ethical decision making. We gave four scenarios to the students and asked them to rank the significance of the variables to their decision. Primary data were collected by self-administrated questionnaire involving a sample of 110 undergraduate accounting students’. From the result, we found that desired of outcome and moral obligation played significant role in explaining ethical decision making