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Article
Publication date: 23 October 2007

Akmalia Mohamad Ariff, Muhd Kamil Ibrahim and Radiah Othman

The purpose of this paper is to provide an extension of the Corporate Governance Reporting Initiative (CGI) 2004, which reports on Malaysia's first corporate governance

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Abstract

Purpose

The purpose of this paper is to provide an extension of the Corporate Governance Reporting Initiative (CGI) 2004, which reports on Malaysia's first corporate governance ratings. Characteristics of firms with high and low scores in the corporate governance ratings are analysed by comparing companies based on their corporate governance ranking as reported in the CGI.

Design/methodology/approach

Firms are classified into those at the top 50 percent and the bottom 50 percent of the corporate governance ratings list to examine whether there are any differences in the characteristics of firms in both classified samples. The characteristics of firms that are being examined are firms' profitability, leverage, growth, market valuation, size, age, ownership structure and countries of operation based on the Logit analysis.

Findings

The result shows that firm size has a strong influence with corporate governance ratings, but not so for other variables tested.

Research limitations/implications

This study analyses only eight corporate characteristics. There are other measures that can represent firms' size such as market capitalization.

Practical implications

It is hoped that the traits found from the analysis will be able to provide additional information concerning corporate governance to interested parties. The characteristics revealed may probably be found to be essential elements in the development of effective and efficient corporate governance structure. The study could also help corporations in their short‐ and long‐term strategies.

Originality/value

This study bridges the gap of previous studies by using a complete set of governance standards on the analysis and directly identifies firms with certain scores of corporate governance and addresses issues related to these exceptional companies.

Details

Corporate Governance: The international journal of business in society, vol. 7 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 28 January 2020

Norakma Abd Majid, Akmalia Mohamad Ariff and Nor Raihan Mohamad

The Islamic bond, known as sukuk, is an ethical financing avenue driven by religious and profit motives. This study aims to analyze the relation between related party…

Abstract

Purpose

The Islamic bond, known as sukuk, is an ethical financing avenue driven by religious and profit motives. This study aims to analyze the relation between related party transactions and Sukuk. Companies with high related parties transactions are deemed to be committed toward social capital that they are more likely to choose sukuk for their debt financing.

Design/methodology/approach

Logistic regression analyses were conducted using data from 122 listed companies in Malaysia. Related party transactions proxy for companies’ commitment to social capital, while the likelihood to choose sukuk represents ethical financing.

Findings

This study documents a positive relationship between related party borrowings and sukuk, suggesting that close ties through related parties have created an ethical sense that is associated with the uptake of sukuk.

Research limitations/implications

Future research can opt other measures of related party transactions, such as by identifying the different categories of transactions and related parties. Future research may also extend the sample size by using samples from several countries to enable analysis involving institutional environment variables of the countries.

Practical implications

Findings of this study highlight sukuk uniqueness by supporting its role as ethical financing avenue through commitment toward social capital.

Originality/value

This study is the first to use the social capital perspective of related party transactions in identifying ethical financing choice that the authors believe is relevant in the institutional context of developing Muslim countries.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 6
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 3 December 2021

Tuan Mastiniwati Tuan Mansor, Akmalia Mohamad Ariff, Hafiza Aishah Hashim and Abdul Hafaz Ngah

This study aims to examine the roles of perceived organisational support (POS), attitude and self-efficacy in understanding the external whistleblowing intentions among…

Abstract

Purpose

This study aims to examine the roles of perceived organisational support (POS), attitude and self-efficacy in understanding the external whistleblowing intentions among senior auditors through the lens of stimulus–organism–response theory.

Design/methodology/approach

This study uses data from 119 senior auditors in audit firms in Malaysia. POS is predicted to be a stimulus factor from the external environment that affects the attitude and self-efficacy (organism) of the auditors and reassures them to act to whistleblow (response).

Findings

POS has a significant impact on self-efficacy and on attitude. Self-efficacy is shown as a significant mediator between POS and external whistleblowing intentions, but there is no statistical support for self-efficacy having a mediating effect on the relationship between the attitude of senior auditors and external whistleblowing intentions.

Practical implications

The findings can assist accounting professional bodies in understanding the psychological behaviours of auditors that contribute to their intention to shine a light on wrongdoing in audit firms and in providing a better insight into the critical factors that could influence auditors to whistleblow.

Originality/value

This study is among the earliest to investigate the application of stimulus–organism–response theory in whistleblowing, and hence it illustrates how the theory can be applied in studies on the ethical behaviours of actors in professional careers. The findings shed light on the role of self-efficacy as a significant mediator between POS and external whistleblowing intentions.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 24 August 2020

Tuan Mastiniwati Tuan Mansor, Akmalia Mohamad Ariff and Hafiza Aishah Hashim

Despite various regulatory frameworks to combat unethical conduct, fraud and corruption remain alarmingly high. While whistleblowing is an important mechanism to identify…

Abstract

Purpose

Despite various regulatory frameworks to combat unethical conduct, fraud and corruption remain alarmingly high. While whistleblowing is an important mechanism to identify and prevent unethical conduct, there is a lack of empirical studies on this issue in the Malaysian context, especially whistleblowing within the audit firms. Therefore, the purpose of this paper is to examine the whistleblowing intention of external auditors in Malaysia and the factors influencing this intention.

Design/methodology/approach

Data were collected using a structured questionnaire that was sent by post to external auditors throughout Malaysia. Participants were selected using a convenience non-probability sampling technique. A total of 274 responses were analyzed. SmartPLS version 3.2.8 was used for the analysis.

Findings

Professional commitment and independence commitment had a positive influence on whistleblowing intention, supporting the argument that professional factors can increase the intention of the external auditors to whistleblow. Perceived behavioural control had a positive relationship with whistleblowing intention, while there is no evidence to indicate that attitude and subjective norms influence whistleblowing intention.

Originality/value

This study explored whistleblowing among external auditors in Malaysia by focussing on the professional factors of professional commitment and independence commitment, which were hypothesized to be key factors in intention to whistleblow. These factors were incorporated with a multi-component of attitude, subjective norms and perceived behavioural control, which were derived from the theory of planned behaviour. The findings have implications for the auditing profession because they provide a better understanding of the factors that influence the whistleblowing intention of external auditors.

Details

Managerial Auditing Journal, vol. 35 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 9 June 2020

Khairul Anuar Kamarudin, Akmalia Mohamad Ariff and Wan Adibah Wan Ismail

This paper aims to investigate the joint effect of product market competition (PMC) and institutional environment on accrual quality.

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Abstract

Purpose

This paper aims to investigate the joint effect of product market competition (PMC) and institutional environment on accrual quality.

Design/methodology/approach

The sample covers a large data set of 52,138 firm-year observations from 35 countries over the period of 2011-2015. Using the weighted least square regression, the study estimates PMC and institutional environment on accrual quality. The study measures PMC based on Herfindahl-Hirschman index, anti-director rights index (ADRI) based on the revised and updated La Porta et al.'s (1998) and accrual quality using the modified Dechow and Dichev (2002) model proposed by McNichols (2002). The study also uses a series of specification tests using alternative measures for each variable.

Findings

The study finds that highly intensified PMC relates to a lower quality of accruals. The results also show that accrual quality is better in countries with stronger institutional environment, specifically countries with higher ADRI, investor protection, judicial independence, protection of minority shareholders’ interests, protection of property rights, strength of the auditing and reporting standards, efficacy of corporate boards and corporate ethics. The findings suggest that institutional factors weaken the negative impact of PMC intensity on accrual quality, hence suggesting that institutional environment has a significant role to enhance accrual quality among firms in highly intensified industries.

Practical implications

The findings provide additional insights to policymakers and regulators on the importance of strong institutional and industry environment that can provide incentives and extra governance mechanisms besides the conventional firm-level corporate governance.

Originality/value

This study contributes in understanding the impact of intensity of PMC on accrual quality internationally and subsequently highlights the role of institutional environment as significant country-level governance in determining financial reporting quality, particularly accrual quality.

Details

Pacific Accounting Review, vol. 32 no. 3
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 20 January 2020

Tuan Azma Fatiema Tuan Ibrahim, Hafiza Aishah Hashim and Akmalia Mohamad Ariff

The purpose of this study is to investigate the relationship between ethical values and performance in the context of the banking sector in Malaysia.

Abstract

Purpose

The purpose of this study is to investigate the relationship between ethical values and performance in the context of the banking sector in Malaysia.

Design/methodology/approach

Based on the philanthropic model, this study posits that firms undertaking zakat and charity are ethical firms. Zakat disclosure index (ZDI) and charity disclosure index (CDI) were constructed to measure ethical values. This study hypothesises that ethical values are positively associated with bank performance. Ethical values (i.e. CDI and ZDI) and financial performance data (i.e. return on assets) were collected from the disclosures made in the annual reports of 50 banks for a period of five years (2010-2014).

Findings

A positive association was found between zakat disclosure and bank performance. The results indicate that higher zakat disclosure is associated with greater bank performance. However, no relationship was found between charity disclosure and bank performance.

Research limitations/implications

Considering the limitation of the index used in this study, other dimensions such as corporate governance, sustainability, products and environment can be considered in the development of index to measure ethical values in future studies.

Originality/value

This study offers additional explanation on the relationship between ethical values and performance by examining the role of zakat disclosures that characterize the unique aspects of Malaysian companies.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 27 August 2021

Khairul Anuar Kamarudin, Akmalia M. Ariff and Wan Adibah Wan Ismail

This study aims to investigate whether board gender diversity is associated with corporate sustainability performance and whether industry-level product market competition…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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.

Details

Journal of Financial Reporting and Accounting, vol. 20 no. 2
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 11 August 2021

Tuan Mastiniwati Tuan Mansor, Akmalia M. Ariff, Hafiza Aishah Hashim and Abdul Hafaz Ngah

This study aims to investigate external auditors’ whistleblowing intentions by applying the moderated multicomponent of the theory of planned behaviour (TPB)…

Abstract

Purpose

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.

Design/methodology/approach

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

Findings

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.

Practical implications

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.

Originality/value

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.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

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