Corporate Governance and the Relationship between Default Risk and the Earning Response Coefficient

This study examines the effect of corporate governance on the relationship between default risk and the earnings response coefficient (ERC). Using a sample of 2,004 firm-years comprising 334 firms listed on the Bursa Malaysia over a six year period from 2002 to 2007, this study tests whether corporate governance mitigates the effect of default risk on ERC while controlling for the established determinants of ERC — beta, growth, earnings persistence and size. Using reverse regression, the study confirms that beta is negatively related to ERC and that growth, earnings persistence and size are positively related to ERC. Default risk is found to be negatively related to ERC thus confirming that beta is only a partial measure of risk relevant to ERC. Corporate governance — as indicated by audit quality, audit committee expertise and independence, and board independence and board shareholding — mitigates the negative effect of default risk on ERC. The results of the study hold both for the pooled sample of 2,004 firm-year observations and on a year by year basis for the 334 firms in the sample. The results are also found to be robust to various sensitivity tests including to alternative measures of the variables. The study thus provides systematic and comprehensive additional evidence on the determinants of ERC. Of itself this is an important contribution to the literature but especially so given that the evidence comes from Malaysia — an emerging economy — whereas the existing empirical literature relates mainly to developed countries

ENHANCING ORGANISATIONAL ACCOUNTABILITY: THE ROLE OF HUMAN RESOURCE MANAGEMENT IN MALAYSIAN STATUTORY BODIES

Background and Purpose: Using the Social Contract Theory underpinning, this research examines the relationship between human resource management (HRM) and accountability within Malaysian statutory bodies.   Methodology: A quantitative approach was employed to gather data from 195 online surveys distributed to CEOs of Malaysian statutory bodies. 186 usable responses were obtained for further analysis. Statistical techniques were applied to assess the relationship between HRM and accountability.   Findings: The study’s results reveal a positive and significant relationship between HRM practices and accountability within Malaysian statutory bodies. These findings highlight the critical role of HRM in promoting accountability and ensuring the successful fulfilment of socioeconomic obligations in emerging countries like Malaysia.   Contributions: This study contributes to the existing literature by exploring the association between HRM and accountability in Malaysian statutory bodies. Additionally, it incorporates the Social Contract Theory to provide a unique theoretical lens for understanding this relationship.   Keywords: Human resource management, accountability, Malaysian statutory bodies, social contract theory. Cite as: Yahya, N., Said, J., Zakaria, N. B., & Baltov, M. (2023). Enhancing organisational accountability: The role of human resource management in Malaysian statutory bodies.  Journal of Nusantara Studies, 8(TI), 453-479. http://dx.doi.org/10.24200/jonus.vol8issTIpp453-47

Enhancing banking performance through holistic risk management: the comprehensive study of disclosure approach / Marhamah rafidi … [et al.]

Enterprise risk management (ERM) concept received much attention from businesses and industries in Malaysia, in practice Bursa Malaysia introduced new guideline on voluntary risk disclosure practice in annual report which also known as 2013 Bursa Malaysia Guideline (effective on 1 January 2013). However, overall development and practical application of 2013 Bursa Malaysia guideline has been rather limited studies especially in banking area. Apparently, scholarly research activities in this particular area of interest are totally lacking hence lead to the essential need of this empirical study. In line with that statement, this paper aims to investigate the significant mean difference of ERM adoption among Malaysian Banking Institutions before and after a new guideline is in effect were based on voluntary disclosure practices in the annual report using common terms as a proxy for ERM adoption, and also investigate its effect onto banking performance. Content analysis was performed on the annual reports of 102 banking institutions; in addition return on Assets (ROA), return on Equity (ROE) and Non-Performing Loan (NPL) were used to determine the effect of ERM adoption towards banking performance. All in all, the findings show that the overall level of ERM disclosures among Malaysian banking institutions have improved significantly after and before the cut-off date the 2013 Bursa Malaysia Guideline is in effect. In conjunction, the findings also reveal that ERM disclosure is positively influenced the Return on Asset (ROA) and Return on Equity (ROE) in banking institutions whereas ERM disclosure do not influenced on Non-Performing Loan (NPL)

Mitigating dysfunctional audit behavior: analysis of organizational commitment, auditor performance and turnover intention / rizqa Anita … [et al.]

Public accounting firms are expected to increase audit quality with mitigating dysfunctional behavior. Understanding what causes dysfunctional audit behavior is critical for public accounting firms. The purposes of this study are to investigate the effects of organizational commitment on auditor acceptance of dysfunctional audit behavior through turnover intention and auditor performance. The Partial Least Square analysis was applied to a questionnaire survey data from 129 auditors working in public accounting firms in Sumatera Island (Indonesia). results indicate that auditors who are more accepting of dysfunctional audit behavior tend to possess an exhibit higher turnover intention, report lower level of auditor performance and weak organizational commitment. Further analysis found that turnover intention and auditor performance mediate the effect of organizational commitment on auditor acceptance of dysfunctional audit behavior

Ethical values and competitiveness within concentrated ownership structure in Malaysia / Mohd Farhan Mohd Dah … [et al.]

Ethical values of business are normally jeopardized by the stiff competitions among them. Thus, ownership structure plays vital roles to balance these issues. This paper aims to study the relationship between ownership structures and performance pre and post Malaysian Codes on Corporate Governance (MCCG) 2012 revision. Based on a random sampling of 100 Bursa Malaysia listed companies, a final of 500 firm-year observations were chosen for the duration of 2010 till 2014. This study engaged several univariate and multivariate analyses to serve the empirical evidence. Despite the better Corporate Governance practices among the sample companies, the multivariate results showed that family ownership, government ownership, institutional ownership and company size have significant and positive relationship with firm performance only for MCCG 2012 revision. Due to the unfavorable Malaysian stock market for both 2013 and 2014, the results of post MCCG 2012 revision showed an insignificant effect between ownership structures and firm performance. Even though the corporate governance practices were favorably reported, the ownership structures were still powerless to influence the firm performance

Methodological Issues in Whistle-blowing Intentions Research: Addressing the Social Desirability Bias and Order Effect Bias

AbstractThe issues of social desirability bias and order effect bias are common problems in ethics. Methodologically, these two problems may weaken the study's validity and reliability thus, making the results of the study invalid. Utilizing vignettes in whistle-blowing research may further add to these problems as the case scenario in the vignettes may enhance respondents’ social desirability bias and the sequence of presentation order of vignettes may then present the problem of vignettes’ order effect bias. The paper addresses these two problems by statistically examining the effects of these two types of bias within the study of whistle-blowing intentions

Capitalising on mobile instant messaging for undergraduates business empowerment / Che Faridah Che Mahmood ...[et al.]

Mobile Instant Messaging (MIM) or Instant Messaging (IM) via various web-based applications like WeChat, Viber, WhatsApp (WA) and Snapchat have gained much attention. It allows mobile phone users to access instant messaging services right from their smartphones. Despite various general publications indicating the advantages of mobile business, ranging from the start-up cost, flexibility, mobility up to inventory, the MIM’s application via mobile businesses are still scarce. The aim of this study was to examine the realm of MIM usage as a platform for mobile business among undergraduates in Malaysia by examining the uses of MIM for mobile business and to identify the perceived advantages of MIM as a platform for mobile business. An online questionnaire was designed and randomly distributed among identified undergraduates who have actively engaged in mobile business. The results show that MIM is frequently used to advertise and sell products most needed by undergraduates. Among the perceived advantages of MIM as a platform for mobile business is its cost effectiveness. In addition, undergraduates can easily and conveniently start-up mobile businesses and generate income simply via a mobile device and a mobile number as it is indeed preferable for reaching a general audience

The effect of consumers’ interest, information access and spending willingness on halal products trustworthiness / Nor Balkish Zakaria … [et al.]

Halal certification provides assurance to the consumers particularly the Muslims that the ingredients used and the production processes are according to shariah. The urge of attention to this issue departs from the trust of Muslim consumer to the certification process itself as many fake Halal logo certifications were lodged. Although, many recent studies on Halal issues, nevertheless, much left to be explored on the trustworthiness of Halal for consumers with regard to their purchasing decision. Hence, the purpose of this study is to investigate the effect of consumers’ interest, information access and spending willingness towards the trustworthiness on Halal products. Based on a survey of 167 Malaysian Muslim respondents, the results of this study reveal that trust worthiness of Halal is significantly affected by consumers’ interest on Halal products, their spending willingness and their level of education. This study contributes to the extent literature on Halal trustworthiness among related consumers