Shamsul Nahar Abdullah and Ku Nor Izah Ku Ismail
The purpose of this paper is to determine whether the representation of women on the boards (WOMBDs) and audit committees is associated with a reduction in the practice of…
Abstract
Purpose
The purpose of this paper is to determine whether the representation of women on the boards (WOMBDs) and audit committees is associated with a reduction in the practice of earnings management and whether women are associated with income reducing (conservative) rather than income-increasing (aggressive) earnings management. The authors further argue that family ownership moderates the relationship between the presence of WOMBDs and audit committees and earnings management.
Design/methodology/approach
The study uses non-finance firms listed on Bursa Malaysia over a period of four years, i.e. from 2008 until 2011.
Findings
The evidence reveals that the presence of WOMBD or audit committee is not associated with a propensity for earnings management. In addition, the evidence also reveals that family ownership does not interact either with WOMBD or with women on the audit committee (WOMAC) to influence the propensity for earnings management. Nevertheless, the additional analyses show that, while women on boards are not associated with income-decreasing accruals, the presence of women on audit committees leads to income-reducing earnings management. The evidence further reveals that family ownership does not interact with either WOMBD or WOMAC to influence income-decreasing earnings management.
Originality/value
This study extends prior research on the role of women directors and women audit committee members on earnings management focussing on family ownership. Further, the study also examines the direction of earnings management as opposed to the most prior studies, which mainly focus on the propensity of earnings management.
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Azhar Abdul Rahman and Mohd Diah Hamdan
The purpose of this paper is to investigate Malaysian companies’ compliance with mandatory accounting standards. Specifically, this study examines the efficacy of agency-related…
Abstract
Purpose
The purpose of this paper is to investigate Malaysian companies’ compliance with mandatory accounting standards. Specifically, this study examines the efficacy of agency-related mechanisms on the degree of compliance with Financial Reporting Standards (FRS) 101, Presentation of Financial Statements. It so proceeds by focussing on corporate governance parameters (board characteristics and ownership structure) and other firm characteristics.
Design/methodology/approach
Using data drawn from a sample of 105 Malaysian companies listed on the ACE market in 2009, the authors employ multiple regression analysis models to establish whether selected corporate governance and company-specific characteristics (proxying for agency-related mechanisms) are related to the degree of disclosure compliance.
Findings
The results indicate that the overall disclosure compliance is high (92.5 per cent). Furthermore, only firm size is positively associated with the degree of compliance. The other variables, those consisting of board independence, audit committee independence, CEO duality, the extent of outside blockholders’ ownership and leverage, do not show any significant relationship with the degree of compliance.
Research limitations/implications
This study focusses on only one accounting standard (FRS 101) that is mandatory in Malaysia. FRS 101 is both structured and rigid, leaving no room for companies to conceal any particular information. The sample of Malaysian companies selected is restricted to those listed only on the ACE market. As such, the results cannot be generalised to every company in Malaysia.
Practical implications
These results have important implications for policy makers because they suggest that whilst agency-related mechanisms may motivate compliance with mandatory standards, full compliance may be unattainable without regulations.
Originality/value
This is the only study in Malaysia to investigate the impact of regulatory requirements on corporate compliance level by companies listed on the new ACE market, which was introduced by the Bursa Malaysia in August 2009. This study contributes to the literature by examining the effects of both company-specific characteristics (such as company size, company age, liquidity, etc.) and corporate governance parameters on the degree of corporate compliance with mandatory disclosure, simultaneously, in contrast with prior studies which have examined them in isolation.
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Norhayati Rafida Abdul Rahim, Ismail Abdullah, Noor Azrina Yahya, Muhammad Nizam Awang, Siti Zubaidah Muhammad, Safiyyah Ahmad Sabri and Norfaizah Nadhrah Ahmad
This study aims to identify the negotiation parameters of needs for Halal talents in Malaysia and proffer solutions on the sustainability of halal talents in Malaysia.
Abstract
Purpose
This study aims to identify the negotiation parameters of needs for Halal talents in Malaysia and proffer solutions on the sustainability of halal talents in Malaysia.
Design/methodology/approach
A focus group discussion was performed among seven Halal talents from the industries of various schemes. Using the theory of inventive problem solving (TRIZ) analysis approach, a functional model, as well as causes and effect analysis, is generated by the participants. The model is translated into a contradiction matrix to obtain the necessary solutions in developing a sustainable framework for Halal Talents in Malaysia.
Findings
The cause-and-effect analysis reveals that poor career path, lack of training and poor salary structure are experienced by the participants.
Research limitations/implications
Having had vast categories of halal industries, this research focuses on nine schemes under halal certification JAKIM which excludes banking and tourism.
Practical implications
It is suggested that the implementation of mutual benefits should be in place to enhance positivism among Halal talents in the near future.
Originality/value
Unlike the social science approach, the use of TRIZ analysis provides a substantial framework of sustainability among halal talents in Malaysia.
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Abdullah Hamoud Ismail, Azhar Abdul Rahman and Abdulqawi Ahmed Hezabr
This study aims to identify factors that influence corporate environmental disclosure (CED) quality.
Abstract
Purpose
This study aims to identify factors that influence corporate environmental disclosure (CED) quality.
Design/methodology/approach
Using content analysis, an index and scoring scheme were applied to annual reports, stand-alone reports and corporate homepages of a sample of 116 oil and gas companies in 19 developing countries (DCs).
Findings
The results of this study reveal that out of 12 hypothesized variables, only 5 variables (company size, foreign ownership, profitability, leverage and membership of industry’s associations) are positively related to the CED quality.
Practical implications
The study has implications in enhancing the understanding of CED practices by oil and gas companies in DCs and the factors that influence the quality of such disclosure. Thus, the results of the study serve as input toward the development of improved regulations concerning CED for the oil and gas industry and provide guidelines to the regulators to make relevant decisions on social and environmental information items to be incorporated in the regulatory standards.
Originality/value
The current study attempts to fill the gaps in the literature by examining CED quality (rather than its quantity), concentrating on environmental disclosure made on the three main mediums of reporting. The study also extends previous research of CED by investigating some factors that have the potential to influence the content-quality of environmental disclosure, such as type of company (independent or constrain company) and industry’s association membership which have never been examined in the related literature.
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This chapter explores the complexities surrounding the Malaysian education system in terms of race relations, political need of reform, and geographical diversity. In terms of…
Abstract
This chapter explores the complexities surrounding the Malaysian education system in terms of race relations, political need of reform, and geographical diversity. In terms of race relations, the establishment of vernacular schools which was initially intended to cater to the sensitivities of the multi-ethnic character of the Malaysian population has continued the racial division of students in primary schooling along the lines of ethno-linguistic heterogeneity. This chapter also looks at the Malaysian Education Blueprint, an ambitious plan to reform the education system, which stemmed out of political necessity from the previous government in addressing the public’s disapproval of the education system. Finally, the inherent geographical diversity in Malaysia has further magnified the differences of educational attainment of the different layers of the Malaysian community. Upon addressing these complexities, this chapter then takes an imaginary position on empowering Malaysian teachers as powerful agents in addressing these complexities by equipping them with comparativist insights. By streamlining efforts to provide a platform for intra-country comparative research, this chapter concludes that previous education reforms in Malaysia were unsuccessful due to the lack of research-based evidence.
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Mirwanee Ha, Asmak Ab Rahman and Azizi Che Seman
Purpose – The objective of this study is to assess the level of understanding of family takaful among the Muslim community of southern Thailand.Methodology/approach – This study…
Abstract
Purpose – The objective of this study is to assess the level of understanding of family takaful among the Muslim community of southern Thailand.
Methodology/approach – This study used a questionnaire as the data collection tool. It sampled 400 respondents who were selected in a simple way, regardless of whether they owned protection policies or not. The methods used to analyse the data are descriptive statistics and means, and independent samples T-testing.
Findings – The study found that the Muslim community in southern Thailand had a generally low level of understanding of family takaful. However, the differences in the level of understanding between those who participated in family takaful and those who did not were examined. The research findings were then found to indicate that there was a distinction between the two groups: those who participated in family takaful had a clear and positive understanding of it, while those who did not had no clear understanding of it. These are significant differences which signify that participation in family takaful by Muslims in southern Thailand was influenced by their understanding of it.
Research limitations/implications – This study was conducted in the Muslim community in and around Muang District, Narathiwat Province, in southern Thailand.
Practical implications – This study clearly indicates, especially to those involved directly or indirectly in the takaful industry, that there are still many in the community who do not participate in family takaful because they lack understanding and have negative perceptions of it. Those who are involved must make the effort to communicate more in-depth insights to target communities, which could effectively enhance the uptake of family takaful.
Originality/value – This is the first empirical study of takaful in Thailand. It was conducted to determine the level of understanding of family takaful in the Muslim communities of southern Thailand and to compare the levels of understanding of family takaful between those who have participated in it and those who have not.
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Donnalyn Pompper, Tugce Ertem Eray, Eric Kwame Adae, Elinam Amevor, Layire Diop and Samantha Nadel
We enjoin stakeholder theory, radical-cultural feminist theory, and critical race theory with critical intersectionality to critique findings which suggest that there still are…
Abstract
We enjoin stakeholder theory, radical-cultural feminist theory, and critical race theory with critical intersectionality to critique findings which suggest that there still are significantly more men than women on nearly every Fortune 500 board of directors, with only six corporations featuring (50-50%) gender equity in 2017. Also, only 4.1% board members are women of color and 9% are men of color. Sixty-five people of color on corporate boards serve on more than one board. This means there are even fewer people of color filling top corporate leadership positions than meets the eye. The proposed alternative course of action is for boards of directors to follow the example of the small handful of peer Fortune 500 corporations that have achieved greater levels of board diversity, equity, and inclusion.
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Ayman E. Haddad, Fatima Baalbaki Shibly and Ruwaidah Haddad
The purpose of this study is to investigate the voluntary disclosure of accounting ratios in the corporate annual reports of manufacturing firms in the Gulf Cooperation Council…
Abstract
Purpose
The purpose of this study is to investigate the voluntary disclosure of accounting ratios in the corporate annual reports of manufacturing firms in the Gulf Cooperation Council (GCC) and determines whether an association exists between voluntary disclosure and firm-specific characteristics namely, size, profitability, leverage, liquidity and efficiency.
Design/methodology/approach
A sample of 53 GCC listed manufacturing firms and 263 firm-year observations were observed over the period 2011 to 2015. A count data regression (Poisson) with incident rate ratios was used to identify the relationship between firms’ voluntary disclosures of accounting ratios and other firm-specific characteristics.
Findings
During the period under review, the voluntary disclosure of accounting ratios provided in annual reports of GCC firms were found to be exceedingly low. On average, a GCC company discloses at most two accounting ratios in its annual reports. The results also show that the profitability ratios are the most popularly reported ones. Controlling for family board domination, the results also reveal that structure-related variables (firm size and leverage) are positively associated with accounting ratio disclosures. However, performance-related variables (profitability, liquidity and efficiency) have no significant effect on disclosures. The authors conclude that signaling theory as implied in the performance-related variables is not strongly supported in the GCC region.
Originality/value
This is the first known study to investigate the disclosure of accounting ratios and its determinants within the context of GCC. The findings of this study could be beneficial to both agents and principals in assessing the associated risks. The study provides regulators and market participants an understanding of the corporate reporting activities of manufacturing firms in the GCC and who accordingly will be able to consider associated policy implementation.
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Mujeeb Saif Mohsen Al-Absy, Ku Nor Izah Ku Ismail and Sitraselvi Chandren
The purpose of this paper is to examine the influence of the characteristics of audit committee chairman (ACC) (tenure, age, gender, ethnicity, accounting expertise and…
Abstract
Purpose
The purpose of this paper is to examine the influence of the characteristics of audit committee chairman (ACC) (tenure, age, gender, ethnicity, accounting expertise and directorship) on earnings management (EM) practices.
Design/methodology/approach
The Jones model and modified Jones model by Dechow et al. (1995) were used to determine the discretionary accruals (DA) of 288 Malaysian listed firms with lowest positive earnings for the years 2013‒2015.
Findings
The results of the ordinary least squares regression indicate that only tenure, gender and ethnicity of the ACC are associated with DA. A further test was conducted by dividing firms into two groups: firms whose boards are chaired by a family member and firms whose boards are chaired by a non-family member. The results reveal that it is possible for firms whose boards are chaired by family members to cause the corporate governance (CG) mechanisms, particularly the audit committee, to lose their effectiveness in overcoming the EM problem. In addition, robustness tests were conducted by using panel data regression, where the results were found to be similar to the original regression results.
Originality/value
This study alerts policymakers, firms and their stakeholders, as well as researchers, regarding the importance of having an independent board chairman, who has no relationship with any directors or major shareholders, as this may hinder the effectiveness of CG mechanisms in curbing EM, especially in emerging countries, such as Malaysia, where it is very difficult to stop members of the family from becoming board directors.
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Saleh F.A. Khatib, Dewi Fariha Abdullah, Ahmed Elamer and Saddam A. Hazaea
This study aims to provide a comprehensive review of the existing literature on corporate governance (CG) aspects of the Malaysian market. It offers insights into the phases of…
Abstract
Purpose
This study aims to provide a comprehensive review of the existing literature on corporate governance (CG) aspects of the Malaysian market. It offers insights into the phases of Malaysian CG, identifies crucial gaps in the literature and outlines an agenda for impending research.
Design/methodology/approach
Following a systematic literature review approach, a final sample of 125 studies from Scopus and Web of Science databases was used in this study. These studies were selected based on quality assessment criteria. Then, the sample literature was evaluated in terms of journals, methodology, theories, modelling, research outcomes and CG characteristics.
Findings
The results show that there is a growing interest among researchers to further explore CG aspects in Malaysia due to the continuous development of the Malaysian CG codes. Likewise, the review reveals that the majority of prior studies are quantitative and were carried out using archived data from non-financial firms. Also, the existing literature has primarily focused on the outcomes of CG, especially firm performance.
Research limitations/implications
Overall, the results show that there is ample room for future research. The present paper identifies a number of methodological problems and concerns, and discusses the implications of these problems, while also providing recommendations for future research. The main caveat is that the authors use scholarly papers published in academic journals only, but this approach offers them with opportunities for considerable further developments.
Originality/value
To the best of the authors’ knowledge, this study contributes to the literature by being the first of its kind to concentrate on the Malaysian context. It provides a comprehensive knowledge assessment of the Malaysian CG research and offers advice regarding improvements in research, policy and practice by identifying possible knowledge gaps. Consequently, this study provides a cohesive story of the past and a road map for future research on Malaysian CG.