Mutalib Anifowose, Salihin Abang and Muntaka Alhaji Zakari
This paper examines the going concern of integrated reporting <IR> as the pessimistic about its sustainable value relevance is gaining momentous. The study employs a quantitative…
Abstract
Purpose
This paper examines the going concern of integrated reporting <IR> as the pessimistic about its sustainable value relevance is gaining momentous. The study employs a quantitative approach to data analysis and mainly sourced secondary data from integrated reports of 83 sampled companies.
Design/methodology/approach
Utilising data from the companies' integrated reports from 2015 to 2018, the study analyses the impact of <IR> capitals disclosure on corporate sustainable value. <IR> was proxied by its six capital elements, which include financial, manufactured, human, intellectual, natural and social, and relationship capitals, while sustainable value was surrogated by the cost of financing and revenue growth rate. The study develops a checklist and utilises content analysis to score the quality of disclosure by sample companies during the period.
Findings
The longitudinal panel data analysis results reveal that on overall disclosure, <IR> capital has a significant positive effect on the revenue growth but fails to document such on the cost of financing. Meanwhile, on the individual level, human capital and natural capital disclosure have an indirect effect on the cost of financing, while all the six subclassifications affect the revenue growth of the sampled companies.
Research limitations/implications
The study sampled only 83 companies across the region due to the limited availability of data. Therefore, the generalisation of findings might be hindered, and further examination might be considered as more data become available.
Practical implications
The study would support the regulators in developing countries to monitor <IR> practices for their domestic companies. It would assist the International Integrated Reporting Council (IIRC) to review the industry's current <IR> practices and give the reason for better <IR> implementation in the future, from both minority and majority economies.
Originality/value
The study is among the pioneer studies that would consider <IR> research across the Asian continent. The study contributes to the recent discussion about sustainable value relevance of <IR>. Also, it would provide some level of incentive to those charged with governance concerning the voluntary compliance with the <IR> framework.
Details
Keywords
Abang Salihin, A.H. Fatima and Abdulrahman Anam Ousama
This paper aims to determine whether the “true and fair view override” (TFVO) principle is relevant and applicable in Islamic accounting. In addition, the paper examines the roles…
Abstract
Purpose
This paper aims to determine whether the “true and fair view override” (TFVO) principle is relevant and applicable in Islamic accounting. In addition, the paper examines the roles that TFVO could play in Islamic accounting and auditing.
Design/methodology/approach
A qualitative research method was used based on documentary and textual analysis of the Shari’ah fundamentals (Islamic legal sources) and relevant accounting standards and regulations.
Findings
The paper found that the TFVO is relevant and applicable in Islamic accounting and auditing and not contradictory to the rules of the Shari’ah. Therefore, the concept is acceptable for use in Islamic accounting. Moreover, based on the several roles played by the TFVO, in the Islamic context, the practicality of this concept in Islamic accounting provides further justification for its continued usage.
Practical implications
The findings of the paper provide a basis to support the inclusion of the TFVO in Islamic accounting standards, as well as possible usage by Islamic financial institutions (IFIs). Thus, regulators of IFIs and Islamic accounting standards setting bodies can consider it in their challenging task of standardizing accounting practices due to the different interpretations of transactions from the various Madhahib and multiple accounting concepts and practices. In addition, the discussion in the paper reminds accountants and auditors of IFIs and Islamic organizations that providing a true and fair view (TFV) is paramount; thus an override of inapplicable accounting standards and regulation is allowed, but not Shari’ah. Thus, TFVO can assist accountants to record transactions that reflect the economic reality of the IFIs, especially prior to accounting regulations keeping pace with the rapid business environment.
Originality/value
The paper has highlighted a very important issue relating to the TFV, specifically the TFVO, from the Islamic perspective. The paper is considered as the first paper that contextually analyses this issue based on Islamic legal sources using a qualitative approach. In addition, the paper has contributed to the literature in Islamic accounting and auditing.
Details
Keywords
Zamzulaila Zakaria, Zarina Zakaria, Noor Adwa Sulaiman and Norizah Mustamil
Undergraduate courses: Auditing, Leadership, Management accounting. Postgraduate courses: Leadership, Management accounting.
Abstract
Study level/applicability
Undergraduate courses: Auditing, Leadership, Management accounting. Postgraduate courses: Leadership, Management accounting.
Subject area
Auditing, Leadership, Management accounting
Case overview
This case documents the journey of a professional accountancy organisation, namely, the Malaysian Institute of Accountants (MIA) and document the MIA’s journey on the establishment of digital blueprint for the accounting profession in Malaysia including some major milestone in innovating audit evidence-gathering technique by introducing e-confirm for auditing bank confirmation in Malaysia. This case highlights the significant role played by a lady chief executive officer (CEO) in embarking into the digitalisation of the accountancy profession and practice in Malaysia. While the ultimate objective of digital blueprint is to transform the accounting and auditing practices in Malaysia, the CEO has led by example by embedding digitalisation within MIA’s practices itself.
Expected learning outcomes
The learning outcome of this paper are as follows: to develop students’ understanding on the right attitudes, skills and characters that a successful leader should possess in contemporary business environment by focusing on dilemma and stereo-typing faced by women leaders; to develop the students’ understanding on the changes in business environment particularly the rise of digital technology that affecting the ways in which accounting functions in organisations; to encourage students to be aware that technical accounting knowledge is just one of the key success factors in the career of a professional accountant. The case offer insight into accountants’ role in digital environment and the development needed for accounting profession; to demonstrate how auditing process can benefit from the advancement in technology; and to encourage critical discussion on the development of accounting profession in Malaysia. The case aims to develop students’ critical discussion on the roles of MIA as a regulator of accounting profession and to appreciate historical development of accounting profession in Malaysia. The case also aims to encourage students to realise the existence of other professional accounting bodies, accounting practitioners and academic accountants, and together with MIA, they play significant role in shaping the accounting profession in Malaysia.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Social implications
The case has a strong implication on the role of effective leaders in ensuring that significant efforts involved in digitalisation journal, a vital need for the accountancy professional to continue to be a relevant profession, is a success.
Subject code
CSS 1: Accounting and Finance.
Keywords
Women leadership, Digitalisation, Professional accountancy organisation, Electronic bank confirmation, Malaysia
Details
Keywords
Zurina Shafii and Abdul Rahim Abdul Rahman
This paper aims to examine some issues in IFRS9 with regards to classification and measurement of Islamic financial assets. In addition, the paper discusses the Shariah concerns…
Abstract
Purpose
This paper aims to examine some issues in IFRS9 with regards to classification and measurement of Islamic financial assets. In addition, the paper discusses the Shariah concerns on the use of fair value to measure financial assets.
Design/methodology/approach
This paper adopts qualitative method via the study of documents and textual analysis of Shariah opinions of scholars and relevant accounting standards.
Findings
The paper found that the classification and measurement of equity-based Islamic financial assets do not fit into the “default” classification category of amortised cost, as the future cash flow receivable does not constitute solely the payment of principal and interest (fixed rate payment). With regards to fair value measurement, Shariah concern arises during the adoption of fair value at Level 2 (reference of asset values from input other than quoted prices in active markets) and Level 3 (use of discounted cash flow method to arrive to asset valuation) because of the existence of in uncertainty or gharar as compared to Level 1 (fair value referred to quoted prices of similar assets).
Practical implications
Findings of the paper provide a starting point for a debate and extensive research on issues related to classification and measurement of Islamic financial assets and the use of fair value as a method of subsequent revaluation of Islamic financial assets. The Shariah analysis in the paper is useful for International Accounting Standard Board to engage with Islamic financial institutions and local accounting standard setters to reflect the unique nature of Shariah-compliant financial instruments. The paper serves as a basis to devise technical solutions to address accounting and reporting issues of Islamic financial instruments.
Originality/value
The paper offers Shariah analysis on the issue of classification, measurement and impairment model for Islamic financial assets. The paper is considered as the first paper that examines areas of possible tensions when applying IFRS9 to the accounting of Islamic financial assets. In addition, the paper has contributed to the literature in Islamic accounting and auditing.