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This is the first report on estimates of tax compliance costs of Malaysian companies. Compliance cost is an unavoidable cost of doing business and arises from activities associated with the reporting of income for tax purpose. The average compliance cost per company was estimated to be RM68,836, which is RM0.26 per RM 1,000 sales turnover. Sixty‐one percent of compliance cost was incurred in computation‐related activities and 39 percent in tax planning activities. Measured relative to revenue, the compliance cost is higher for smaller companies than for larger companies, which suggests that compliance cost is regressive, a finding similar to those reported in other countries.

The purpose of this paper is to investigate whether audit quality is associated with real earnings management in the UK.

The authors apply the panel fixed effects method that controls for heterogeneity across firms to investigate whether audit quality is related to real earnings management for a large sample of UK manufacturing companies for the period 2010–2013. The authors utilized three proxies to measure real earnings management and two proxies to measure audit quality.

The results provide evidence that audit fees are negatively related to abnormal operating cash flows. Conversely, audit fees are positively related to abnormal discretionary expenses. Besides, audit quality proxies show insignificant relationship with abnormal production costs and real earnings management index. Overall, the study finds partial evidence of significant relationship between audit quality and real earnings management.

These results are important subject to the adequacy of the indicators of real earnings management and audit quality. Like previous research works that mostly focus on upward earnings management, the authors do not address the question of whether and how firms take real actions to manage earnings downwards in certain contexts.

The findings inform monitoring bodies that the imposition of higher levels of audit quality may result in unintended consequences. Therefore, monitoring bodies, such as audit committees, should consider the implication of imposing higher quality auditing, which may drive firms to potentially value-decreasing real earnings management practices. Managers should curtail real earnings management practices, especially abnormal operating cash flow, because attempt to use higher-quality auditors to mitigate such practice may destroy firm value. Also, managers’ employment may be threatened due to the potential deterioration of firm value caused by using higher-quality auditors to mitigate managers’ real earnings management practices. Moreover, shareholders are informed of the potential detrimental effects of imposing higher levels of audit quality which may lower the value of their investments.

The paper extends previous research on earnings management in several ways. First, while earlier studies usually use accruals methods to measure earnings management, the authors use the real earnings management approach as managers can switch from accruals to real earnings management when facing more scrutiny from auditors and/or more constrained regulations or standards that may limit their capability to use discretionary accruals. Second, this study reports new findings, as the authors find partial evidence of a significant relationship between audit quality and real earnings management. Third, it is one of the few studies to use a real earnings management index to measure earnings management and its link to audit quality.

The purpose of this paper is to examine the relationship between political connections and corporate tax aggressiveness in Malaysia. In addition, this paper investigates the relationship between corporate governance variables and corporate tax aggressiveness. Next, the study investigates the mitigating role of corporate governance in the relationship between political connections and corporate tax aggressiveness.

The sample of this study is based on 2,538 firm-year observations during the 2000-2009 periods. This study employs a panel least square regression with both period and industry fixed effects. The study retrieved the corporate governance variables from the downloaded annual reports, whilst the remaining data were collected from Compustat Global.

This study finds that politically connected firms are more tax aggressive than non-connected firms. Furthermore, the study finds that large board size decreases the likelihood of tax aggressiveness and a non-linear relationship exists between institutional ownership and tax aggressiveness suggesting increase in monitoring as the ownership increases. However, the study finds no evidence to suggest that corporate governance mitigates the influence of political connections in promoting tax aggressiveness behavior. The findings suggest that the impact of political connections could outweigh the benefits of changes in corporate governance in Malaysia.

The data are not recent, but it reflects a rather longitudinal research period.

This paper extends the literature of tax research in Malaysia which is in its’ infancy stage. Furthermore, it investigates the role of political connections in tax-planning research.

This study aims to investigate whether board gender diversity is associated with corporate sustainability performance and whether industry-level product market competition moderates the effect of board gender diversity on corporate sustainability performance.

This study uses international data extracted from global ESG data set from Thomson Reuters (Refinitiv) database. Using data of 23,137 firm-year observations from 37 countries, the authors perform regression analyses to examine the hypotheses.

The findings show that firms with high board gender diversity exhibit high corporate sustainability performance. The authors also find firms in highly competitive industries to have low corporate sustainability performance. In highly competitive industries, the positive relationship between board gender diversity and corporate sustainability performance is weakened. The results are robust to various specification tests such as alternative measures for corporate sustainability performance, board gender diversity, product market competition and also the use of propensity score matching to address endogeneity issue. Overall, the results support the prediction that board diversity and product market competition play a substitutive role in influencing corporate sustainability performance.

This study offers empirical evidence that the appointment of female directors is a useful way to improve a firm’s corporate sustainability performance, hence, providing significant benefits in terms of stakeholders’ values and corporate reputation.

This study provides useful insights to investors and policymakers that intense industry competition might mitigate the role of board governance, particularly board gender diversity, in enhancing corporate sustainability performance.

Using an international data set, where the observations operate in various market and institutional differences, this study is able to extricate the positive impact of board gender diversity and product market competition on corporate sustainability performance. This study corroborates evidence that sustainability strategy and initiatives are reflections of integrated factors, including corporate governance as internal driver and market forces faced by firms as external driver.

This study aims to investigate external auditors’ whistleblowing intentions by applying the moderated multicomponent of the theory of planned behaviour (TPB), incorporating perceived organizational support (POS) and provides insights on the moderating effect of moral norm on the relationship between attitude and internal whistleblowing intentions.

Data was gathered using a questionnaire survey involving 274 external auditors in Malaysia and the data was analyzed using SmartPLS 3.2.9.

The results show that there are positive relationships between perceived behavioural control and POS with whistleblowing intentions, but there is no evidence to support the hypotheses related to attitude and subjective norm. The findings provide partial support for the capability of the multicomponent model of TPB in examining whistleblowing intentions. The results further show that moral norm moderates the relationship between attitude and whistleblowing intentions.

The findings can assist accounting professional bodies and policy makers in formulating strategies to enhance the practice and, consequently, the benefits of whistleblowing. The findings are also valuable to managers of audit firms in strategizing for ways to enhance whistleblowing intentions to encourage the audit staffs to report any wrongdoings done by their colleagues.

This study provides the perspective of whistleblowing intentions of external auditors in the institutional setting of an emerging market, Malaysia. Further, this study extends the TPB model in whistleblowing studies by applying a higher-order construct, incorporating POS as an additional determinant of whistleblowing intentions and considering moral norm as moderating the relationship between attitude and whistleblowing intentions.

This study aims to examine what factors shape Muslim business operators’ attitudes towards pre- and post-value-added tax (VAT) implementation in the United Arab Emirates (UAE).

A longitudinal approach is employed to collect data from a total of 200 respondents, during both the pre-VAT implementation period and the post-VAT implementation period. A partial least squares structural equation modelling approach was performed to analyse the research.

Empirical findings revealed that challenges in implementing the VAT system were the primary predictors of Muslim business operators’ attitudes regarding the pre-VAT implementation period in the UAE because they were aware that the penalties associated with non-compliance would outweigh the costs incurred in preparing for the VAT. During the post-VAT implementation period, awareness was the strongest influence on Muslim business operators’ attitude because there are no income taxes imposed on businesses and individuals in the UAE.

The introduction of VAT in the UAE ignited great controversy on the part of Muslim business operators, who viewed the new tax system as a significant challenge or risk to their careers, especially when they realised that they would have to play a significant role in tax collection. VAT registration should be required for all businesses regardless of size since they are going to be the tax agents for the government. Indeed, the government should finalize policies and procedures on the penalties for non-compliance since such legalities could greatly contribute towards the acceptance of VAT.

Challenges prompted Muslim business operators to become more knowledgeable about VAT, whereas also developing a greater awareness and sense of preparedness regarding the implications of the system on their businesses. This discovery has advanced the theoretical understanding of the topic and its managerial implications.

The purpose of this paper is to identify the drivers of residential price as well as the degree co-movement of housing among different states in Malaysia.

This study adopted an advanced econometrics technique: the dynamic autoregressive-distributed lag (DARDL) and – the time-frequency domain approach known as the wavelet coherence test. The DARDL model was applied to identify the cointegrating relationships and the CWT was used to analyze the co-movement and lead–lag relationships among four states’ regional housing prices. The extracted data were mainly on annual basis and comprised macroeconomics and financial factors. Information with regard to residential prices and other variables was extracted from the National Property Information Centre (NAPIC) website, the Central Bank of Malaysia Statistics Report, the Department of Statistics, Malaysia, I-Property.com and the World Bank (WB). The data covered in this study were the pool data from four main states in Malaysia and different categories of residential properties.

The empirical results indicate that there were long-run cointegration relationships between the housing price and capital gain and loss, rental per square feet, disposable income, inflation, number of marriages, deposit rate, risk premium and loan-to-value (LTV) ratio. While the wavelet analysis shows that (1) in the long run, Kuala Lumpur housing price having strong co-movement with Selangor, Penang and Melaka housing prices except for Johor and (2) the lead–lag relationship also postulates Kuala Lumpur housing price having in-phase category with Selangor, Penang and Melaka housing prices except for Johor.

This study offers relevant practical implications. First, the study proposes an active collaboration between the private sector and government support which may help to smooth the pricing issue of residential properties. More low-cost residential projects are needed for focus groups including middle- and low-income earners. Furthermore, the results are expected to provide real estate investor in Malaysia, an improved understanding of the regional housing market price dynamics.

The findings of this study were obtained from various reliable sources; therefore, the results reflected the analysis of price drivers and co-movements. Furthermore, findings from this study lend some support to the argument on the rise of residential prices and offer several policy implications from a practical point of view with regard to the residential market.

This study examines short‐term stock price reactions to announcements of equity rights offerings in Singapore between 1983 and 2003 and investigates whether economic factors lead to different price reactions. The results show that the cumulative abnormal returns (CARs) associated with rights issues differ significantly across economic conditions at the time of issuance. Rights issues typically result in significantly large positive CARs during periods of economic growth but small positive but insignificant CARs during economic downturns. The CARs vary positively with Tobin’s q‐ratios, which indicate the availability of positive net present value investment opportunities of the firms issuing the rights. Our major finding is that the price reaction of Singapore firms to equity rights offerings is sensitive to economic conditions at the time of the rights issues.

This study aims to investigate whether auditor tenure has a significant influence on accounting quality and whether investor protection moderates the effect of auditor tenure on accounting quality.

This study uses weighted least squares regression on a sample of 77,855 firm-year observations from 36 countries during the period 2010–2016. This study uses the absolute value of performance-matched discretionary accruals to measure financial reporting quality.

This study finds that a longer auditor tenure is associated with higher accounting quality, thus supporting the knowledge effect arguments. The results on the joint effect of investor protection and auditor tenure show evidence of the substitutive effect of investor protection, where the positive impact of auditor tenure on accounting quality is weaker in a high investor-protection environment.

These findings provide input for policy implications involving the auditing profession. Regulators may need to weigh the costs and benefits of mandatory audit rotation because country-level institutional factors influence auditing regulations and practices, as well as the auditors’ behaviors.

This study adds to the limited, albeit important, evidence on the joint effect of auditor tenure and country-level governance on accounting quality. The authors respond to the call by Brooks et al. (2017) for more evidence on the role of audits on financial reporting outcomes across various legal institutions for creating effective policies.

This study examines the relationships between servant leadership and organisational citizenship behaviour (OCB) of young volunteers in non-profit organisations (NPOs) and investigates the mediating role of affective commitment and the moderating role of role identity in this relationship.

Self-administered questionnaires were distributed to 400 young volunteers from NPOs in Malaysia. Data were analysed using the partial least squares-structural equation modelling (PLS-SEM) approach.

The results reveal that affective commitment significantly mediates the relationship between servant leadership and OCB of young volunteers in NPOs. The role of identity was found to moderate the relationship between servant leadership and affective commitment of young volunteers in NPOs.

This study utilised servant leadership theory and examined the direct effect between servant leadership and OCB of young volunteers in NPOs, the mediating effect of affective commitment, and the moderating effect of role identity in this relationship simultaneously within a unified research framework.

NPOs should recruit more servant leaders and provide effective volunteer training and leadership development to current leaders to increase affective commitment and develop better service behaviours in dealing with volunteers.

This study is unique in that it highlights the partially mediated effects of affective commitment on the relationships between servant leadership and OCB of young volunteers in NPOs, as well as the fact that role identity significantly moderates the relationship between servant leadership and affective commitment of young volunteers in NPOs.