Misappropriation of assets: A decepticon of leakages in Malaysian public sector

Decepticon, true to its name, may transform into various disguise.The villain take many forms from a flashy luxurious cars to even military vehicles. Similar to Decepticon, the episodes of misappropriation of assets in government sector runs from small misuse of stationeries to misuse of official vehicles for personal interest. It is indeed a leakage of expenditure to the government because the authority has spent unnecessary costs to cater this type of crime.Many has regarded asset misappropriation as harmless.Though the incidences might not be significant, yet, if it is left untreated, the authority will spend more money than it should. Hence, the objectives of this study is to find the empirical evidence on awareness against fraud deterrence among Malaysian public servants. As propositions, this study resolved on the inspiration that resilience against frauds can be developed through trainings, effective enforcement and control.Barrier such employees’ character should be considered as deterrence for fraud awareness. Based on Rules no.4.(2)(c) of Peraturan-Peraturan Pegawai Awam (Kelakuan dan Tatatertib) 1993 (Pindaan 2002), this research employed semi-structural interview method to capture details and descriptive data so that this study is able to get the comprehensive understanding on the missing link between government inspiration and practice.4 public servants ranging from 1 to 20 years of service have been selected for our preliminary studies to validate our research propositions.In effect, despite of that the policy is massively available in the government’s portal, the respondent claimed that they were not familiar with Rules no.4.(2)(c) and their decisions on the do’s and don’ts are entirely dependable on their faith and internal strength.Mentality of public servants is identified as key barrier towards awareness of fraud deterrence.There were few studies on fraud deterrence in Malaysian public sector.This study focus on the same scenario, yet supplemented with a study on fraud awareness amongst the government servant

Modelling dysfunctional behaviour: Individual factors and ethical financial decisions

In this study, the organisational behaviour comprises of individual factors and industrial psychology literatures provide the basis for the developing and testing an individual factors’ model over dysfunctional audit behaviour. Using a path analysis for direct and indirect effects, survey results from the registered Audit Managers generally support the explanatory model. Overall, the results indicate that auditors who are more accepting dysfunctional behaviour tend to possess an external locus of control and exhibit higher turnover intentions. The results can be useful in the operational and management control mechanism of human and social developments relating to dysfunctional behaviour issues

Dysfunctional audit behaviour: An exploratory study in Malaysia

The quality of the opinion provided by audit firms is an important determinant of their long-term survival, but audit quality is difficult to gauge, which makes it particularly sensitive to the behaviour of the individuals who carry on audit work. This paper seeks to identify the incidence of dysfunctional audit behaviours and audit quality reduction behaviours, actions taken by an auditor during engagement that reduce evidence-gathering effectiveness. The paper is based on a survey of 244 auditors working in small/medium and big audit firms in Malaysia. The paper identifies key variables leading to dysfunctional audit behaviour. The paper is subject to the normal limitations associated with survey research. The paper provides basic empirical evidence of a potentially serious risk of dysfunctional behaviours that may impair audit quality. The paper provides empirical evidence to address the concerns of the Malaysian regulatory authorities regarding audit quality

A study on accounting curricular and future accounting graduates / Halil Paino and Mohd Soffi Puteh

The Faculty of Accountancy plays an important role in the education of accountants beyond the baccalaureate degree. Looking at the advertisements in the newspapers and the way the accounting graduates are being readily absorbed into the job market, one gets the feeling that there is a big demand for accounting graduates and accountants. In addition, the employers want and expect their new – entry professionals to be equipped with all relevant skills and knowledge. In view of the current rapid development in business and technology around the world, an assessment on accounting programmes in this country is needed. This research was, therefore, undertaken to address the current state of accounting education and to find out the perceptions of students, academics, employers and practitioners on the matters reflecting the needs in enhancing accounting education. The findings suggest a combination of intellectual, personal attributes and future competencies needed by all accounting graduates to be included in the curriculum

Forgery in the making of audit report: The liabilities and breach of professional duties

Forgery is a mechanism to commit fraud and involves the modification of original documents without valid authorization. This includes the process of making an audit report by the auditors. This paper will examine the liability of the auditor if he/she fails to identify the existence of forgery and fails to exercise due diligence in the making of audit report

Financial reporting risk and business risk assessments as fraud detection mechanism and its impact on audit pricing / Wan Mardyatul Miza Wan Tahir and Dr Halil Paino

Financial information that has being deteriorated by fraud will misled users. Hence, the main objective of this paper is to identify the association between five ratios of financial reporting risks to predict fraud. Furthermore, this paper also investigates the impacts of fraud detection on audit fee. Thus, sample of 10 of fraudulent companies and sample of 40 non fraudulent companies are being identified to achieve the objective. Stepwise logistic regression was being employed. The results clearly indicate that changes in sales, receivables and allowance for doubtful debts have significant effect of fraud detection. However, fraud detection gives no or little impact on audit fees

Corruption: a comparison between Singapore and Malaysian legal regime / Halil Paino, Khairul Anuar Abdul Hadi and Nafsiah Mohamed.

Corruption is a global problem. Without effective legal regime, corruption would cost economic, political, and social instability. Based on the International Transparency perspective index on corruption, Singapore ranked 8 as less corrupt nation and scored 85 out of 100 based on the transparency index. These data show Singapore as a leading country in fighting corruption in South East Asia region. Therefore, this paper intends to examine the legal regime in Malaysia and Singapore in order to identify the legal gap and propose an improvement and comprehensive legal framework against corruption

Impairment of audit quality: An investigation of factors leading to dysfunctional audit behaviour

This thesis studies dysfunctional audit behaviour in the Malaysian context; to date, no previous study has examined this issue. Within this context, the thesis sets outto accomplish two main goals: (1) to investigate the factors contributing to dysfunctional audit behaviour, and (2) to examine whether audit firm, audit team and individual factors affect dysfunctional audit behaviour. This study was carried out to coincide with the Practice Review currently undertaken by the Malaysian Institute of Accountants (M.I.A.), while the current incidence of auditing and accounting scandals in Malaysia provide another factor that prompted this study. The study was conducted in two phases. The first phase, i.e. the pilot study, explored the incidence of dysfunctional audit behaviour; the second phase, i.e. the main survey, investigated and examined the factors contributing to dysfunctional audit behaviour. This study extends earlier studies on dysfunctional audit behaviour by examining three different factors, namely audit firm, audit team and individual factors. Dysfunctional audit behaviours investigated are: acceptance of weak client explanations; superficial review of documents; reduction of standards of work below levels considered reasonable; failure to research an accounting principle, and premature sign off. Results of the pilot study and main survey demonstrate the existence of dysfunctional audit behaviour in Malaysian practices. Unlike earlier studies of dysfunctional audit behaviour, this study involves the use of higher ranking audit personnel in its sample. The study shows that Audit Managers are resorting to some dysfunctional audit behaviour, and that, given their managerial and supervisory roles, the implications of their behaviour could be serious. Respective professional bodies such as the M.I.A. should react to these incidences, since this behaviour could affect audit quality in the long run. Stronger regulations and a greater emphasis on the ethical aspects of such behaviour are suggested. The results suggest that the M.I.A. might seek to have the law, especially the Accountants Act 1967, amended, so that it can investigate its members for suspected dysfunctional behaviour or wrongdoings, instead of waiting for complaints and referrals. In addition, since the incidence of dysfunctional behaviour relates to individual attitudes to formal controls, it is suggested that the management of audit firms should communicate matters relating to audit quality to their personnel at all levels. Implementation of programs to educate personnel at all levels can help the profession and firm to address the phenomenon of dysfunctional audit behaviour, while the introduction of mandatory minimum hours of Continuing Professional Education (CPE) could support this discussion. While such CPE programs can help prevent the occurrence of dysfunctional behaviours, the mechanism that will help most is adherence to audit field work standards together with appropriate supervision

Dysfunctional audit behaviour: an exploratory study in Malaysia

Purpose – The quality of the opinion provided by audit firms is an important determinant of their long-term survival, but audit quality is difficult to gauge, which makes it particularly sensitive to the behaviour of the individuals who carry on audit work. This paper seeks to identify the incidence of dysfunctional audit behaviours and audit quality reduction behaviours, actions taken by an auditor during engagement that reduce evidence-gathering effectiveness. Design/methodology/approach – The paper is based on a survey of 244 auditors working in small/medium and big audit firms in Malaysia. Findings – The paper identifies key variables leading to dysfunctional audit behaviour. Research limitations/implications – The paper is subject to the normal limitations associated with survey research. Practical implications – The paper provides basic empirical evidence of a potentially serious risk of dysfunctional behaviours that may impair audit quality. Originality/value – The paper provides empirical evidence to address the concerns of the Malaysian regulatory authorities regarding audit qualityAuditing, Behaviour, Malaysia