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Article
Publication date: 14 May 2018

Rahayu Abdul Rahman, Normah Hj Omar, Asheq Rahman and Ruhaini Muda

This paper aims to study the roles of Muslim CEO, Muslim Chairman and Muslim board of directors in mitigating earnings management via real activities manipulation.

Abstract

Purpose

This paper aims to study the roles of Muslim CEO, Muslim Chairman and Muslim board of directors in mitigating earnings management via real activities manipulation.

Design/methodology/approach

In total, 656 firm year-observations from 2007 to 2014 of Malaysian Top 100 firms listed on Bursa Malaysia is used to examine the relationship between real earnings management (REM) and the religious ethical values of Muslim top leadership of the firms.

Findings

The study provides evidence that there was no significant relationship between ethical values and REM measures among Muslim top corporate leaders. However, through additional analysis on sub-sample firms, this study finds that Muslim CEO and Muslim Chairman have a significant and negative association with proxies of REM: RCFO and RPC.

Research limitations/implications

The results show that Muslim CEO and Muslim Chairman are the actors that contribute more control in limiting REM especially in family-owned firms in Malaysia.

Originality/value

This is the first published paper that focuses on Islamic ethical values of corporate top leadership and REM in Malaysia, as previous studies have focused more on accruals earnings management.

Details

International Journal of Law and Management, vol. 60 no. 3
Type: Research Article
ISSN: 1754-243X

Keywords

Content available
Article
Publication date: 30 April 2021

Ajantha Velayutham, Asheq Razaur Rahman, Anil Narayan and Michael Wang

The purpose of this study is to examine the disruptive effects of COVID-19 on supply chains and question the role of accounting information in managing these supply chains…

Abstract

Purpose

The purpose of this study is to examine the disruptive effects of COVID-19 on supply chains and question the role of accounting information in managing these supply chains in the face of such disruptive effects.

Design/methodology/approach

The study first explains the effects of COVID-19 on the supply chains of business entities. It then explains the role of accounting information in supply chain management, questions accounting information's ability to play such a role, and makes recommendations for better accounting disclosures and accounting research for supply chains of firms. To illustrate the salient points, a case study of Fisher and Paykel Healthcare is conducted. It identifies the risks and uncertainties of supply chains exposed by COVID-19 disruptions to businesses.

Findings

COVID-19 has affected Fisher and Paykel Healthcare from both the supply-side (upstream) and demand-side (downstream) perspectives. On the supply side, it has disrupted the supply of raw materials used in the manufacture of respiratory devices and the costs of importing such materials. On the demand side, it has disrupted market logistics and customer demand. This has subsequently affected production. Such disruptions can be overcome through the dissemination of appropriate accounting information for the different stages of the supply chain to the managers. Such accounting information can also be useful to external stakeholders for minimizing their risks.

Originality/value

The study attempts to create an awareness of the supply chain uncertainties faced by managers and stakeholders arising from exogenous shocks, such as a pandemic, and how these uncertainties can be mitigated by aligning accounting information flows with the supply chain activity flows. The observations made in this paper are at a conceptual level and, therefore, can be applied to any industry.

Details

Accounting, Auditing & Accountability Journal, vol. 34 no. 6
Type: Research Article
ISSN: 0951-3574

Keywords

Content available
Article
Publication date: 4 April 2016

Asheq Rahman, Rachel Baskerville and Paul Rouse

Abstract

Details

Pacific Accounting Review, vol. 28 no. 2
Type: Research Article
ISSN: 0114-0582

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Case study
Publication date: 23 November 2016

Asheq Rahman, Hector Perera and Frances Chua

International business, Accounting and Finance.

Abstract

Subject area

International business, Accounting and Finance.

Study level/applicability

Undergraduate and Postgraduate levels (advanced financial accounting, international accounting, other accounting and business courses with an international setting.

Case overview

The case uses the Asia Pulp & Paper Company’s (APP) entry into the international debt market to highlight the consequences of different business practices between the East (in this case, Indonesia) and the West. On the one hand, it shows that APP was set up as the “front” to access international debt capital; on the other, it reveals the naïvety of Western lenders who parted with their funds without conducting a thorough background research on the financial viability of the company they invested in. The APP debacle is a poignant reminder for market participants and business/accounting students that the divergence of the business settings across countries can make business contractual arrangements tenuous and corporate financial information irrelevant to its users. It also exposes the unique ways of how some Asian countries conduct their business affairs.

Expected learning outcomes

The following are the expected learning outcomes: comprehend the impact of differences in culture and ethnic origin on business practices; evaluate the impact of cultural nuances on the legality of contracts in the international business setting; understand the impact of currency fluctuation on the financial position of multinational firms; and be more cautious in conducting business and entering into contracts with foreign firms.

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.

Subject code

CCS 1: Accounting and Finance.

Details

Emerald Emerging Markets Case Studies, vol. 6 no. 3
Type: Case Study
ISSN: 2045-0621

Keywords

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Article
Publication date: 21 October 2019

Sabrina Chong and Asheq Rahman

The purpose of this paper is to identify the web-based features of corporate social responsibility (CSR) disclosure that play a role in making CSR information prominent to…

Abstract

Purpose

The purpose of this paper is to identify the web-based features of corporate social responsibility (CSR) disclosure that play a role in making CSR information prominent to investors and give the information better recognition for investment decisions.

Design/methodology/approach

The authors posit a positive association between the company’s capital market performance and the web-based features used for CSR disclosure by the company. The authors argue that the more effective the feature is in enhancing the prominence of CSR information, the higher is the share turnover and market value of shares of a company, and the lower is its share prices’ bid-ask spread. Five specific web-based features, namely, the location, accessibility, medium, variety and extent of disclosure are identified as features used for web-based CSR disclosure. The research framework is drawn from Brennan and Merkl–Davies’ (2013) impression management strategies and Merton’s (1987) “investor recognition hypothesis”.

Findings

The findings show that visual and structural emphases of CSR information via specific web-based features enhance information prominence and could favourably influence investors’ impression towards the company. Investors are likely to make investment decisions in favour of the company, resulting in a higher share turnover along with increased market value of the shares of the company and lower bid-ask spread of its share prices.

Research limitations/implications

The paper highlights the significance of utilisation of web-based features in enhancing CSR information prominence for impression management purposes.

Practical implications

The findings have the potential to benefit preparers, users and policymakers by enhancing their knowledge and understanding of the utilisation of web-based CSR disclosure features. Specifically, preparers will be more aware of web-based feature(s) that could be useful in projecting CSR-related information to their stakeholders.

Social implications

The study will help enhance the dissemination of web-based CSR information.

Originality/value

The study adds to the literature on web-based CSR disclosure, by developing a structured approach to examine the effectiveness of web-based features for investors’ impression management.

Details

Sustainability Accounting, Management and Policy Journal, vol. 11 no. 1
Type: Research Article
ISSN: 2040-8021

Keywords

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Article
Publication date: 8 January 2020

Muhammad Shahin Miah, Haiyan Jiang, Asheq Rahman and Warwick Stent

This paper aims to investigate the association between International Financial Reporting Standards (IFRS) effort due to higher levels of material adjustments and audit…

Abstract

Purpose

This paper aims to investigate the association between International Financial Reporting Standards (IFRS) effort due to higher levels of material adjustments and audit fees. In addition, this paper tests whether these associations differ between industry specialist auditors and non-specialist auditors.

Design/methodology/approach

The authors measure IFRS effort by using differences between local GAAP and IFRS. More specifically, they measure the differences in the balances of accounts that are prepared under IFRS as opposed to the previously used Australian Accounting Standards Board (AASB) standards. They posit that higher material adjustments and more risk to fair presentation of financial statements require additional accounting and auditing effort (“IFRS effort”).

Findings

The authors find that audit fees are higher when accounting standards are more material and complex at an aggregate level. Nevertheless, not all standards are equally complex and/or material and not all individual standards contribute to higher audit fees. In addition, the results show that the positive association between IFRS effort and audit fees is more pronounced when firms are audited by city-level industry specialists than by non-industry specialists.

Originality/value

Overall, the results are consistent with the prediction of increasing audit fees for firms requiring higher levels of IFRS effort compared to firms requiring lower levels of IFRS effort. The results contribute to the understanding that not all IFRS are equally complex and, thereby, the standards require different levels of auditor effort. Isolating specific standards based on materiality/risk levels is informative to standard setters for standard setting, standard implementation and post-implementation review of standards.

Details

Accounting Research Journal, vol. 33 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Content available
Article
Publication date: 8 April 2014

Asheq Rahman

Abstract

Details

Pacific Accounting Review, vol. 26 no. 1/2
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 1 August 2016

Humayun Kabir, Li Su and Asheq Rahman

The setting of private finance companies that failed in New Zealand during 2006-2012 was characterized by weaker corporate governance and enforcement of securities law…

Abstract

Purpose

The setting of private finance companies that failed in New Zealand during 2006-2012 was characterized by weaker corporate governance and enforcement of securities law. This paper aims to explore audit failure in this setting and examine whether auditors erred in their audits of the failed finance companies and whether the audit failure rate of Big N auditors was different from that of non-Big N auditors.

Design/methodology/approach

This paper adopts the archival research method and uses three sets of evidence to assess audit failure – the frequency of going concern opinion (GCO) prior to failure, misstatements in the last audited financial statements, and the violation of the Code of Ethics.

Findings

The study finds that only 41 per cent of the sample companies received the GCO in their last audit prior to failure and provides evidence of material misstatements in the financial statements of a number of failed finance companies that received clean audit opinions prior to failure and breaches of the Code of Ethics by a number of auditors. These results strongly indicate audit failure for a number of failed finance companies. The audit failure rate, however, appears less for Big N auditors than for non-Big N auditors.

Practical implications

The study draws attention of the stock market regulator and the accounting profession to an area, the audit of private finance companies, that needs better quality audits.

Originality/value

This paper provides systematic evidence of audit failure in failed finance companies in New Zealand. It also furnishes preliminary evidence of Big N auditors compensating for weaker corporate governance.

Details

Pacific Accounting Review, vol. 28 no. 3
Type: Research Article
ISSN: 0114-0582

Keywords

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Article
Publication date: 4 April 2016

Bing Xu, Md. Borhan Uddin Bhuiyan and Asheq Rahman

This paper aims to identify and explain the composition, determinants, relevance and effects of underlying profit and emphasis placed on underlying profit in annual reports.

Abstract

Purpose

This paper aims to identify and explain the composition, determinants, relevance and effects of underlying profit and emphasis placed on underlying profit in annual reports.

Design/methodology/approach

The paper uses multivariate analysis of data from New Zealand listed companies from 2006 to 2010 disclosing both generally accepted accounting principles (GAAP) profit and underlying profit. Value relevance is measured in relation to annual stock returns of companies.

Findings

Tax, financial cost and depreciation and amortization are the three main items excluded from GAAP profit to derive underlying profit. Firms that have lower audit quality and industries prone to higher price fluctuation of assets and higher depreciation and amortization expenses use underlying profit. Also, underlying profit is used by firms with higher differences between statutory and target profits, higher analyst following and higher proportion of independent board of directors. Underlying profit has a weak negative association with annual market returns and significant positive association with volume of shares traded. Finally, the relevance of underlying profit is lower for firms that emphasize underlying profit in their annual reports.

Practical implications

Underlying profit is negatively related to the economic performance of the company in the market, whereas GAAP profit is positively related.

Originality/value

New Zealand has experienced a sharp increase in the use of underlying profits in annual reports. This research adds to our understanding of the use of underlying profit by New Zealand listed companies.

Details

Pacific Accounting Review, vol. 28 no. 2
Type: Research Article
ISSN: 0114-0582

Keywords

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Article
Publication date: 21 June 2018

Ajantha Velayutham and Asheq Razaur Rahman

The purpose of this paper is to empirically investigate whether an individual’s knowledge, skills and capabilities (human capital) are reflected in their compensation.

Abstract

Purpose

The purpose of this paper is to empirically investigate whether an individual’s knowledge, skills and capabilities (human capital) are reflected in their compensation.

Design/methodology/approach

Data are drawn from university academics in the Province of Ontario, Canada, earning more than CAD$100,000 per annum. Data on academics human capital are drawn from Research Gate. The authors construct a regression analysis to examine the relationship between human capital and salary.

Findings

The analyses performed indicates a positive association between academic human capital and academic salaries.

Research limitations/implications

This study is limited in that it measures an academic’s human capital solely through their research outputs as opposed to also considering their teaching outputs. Continuing research needs to be conducted in different country contexts and using negative proxies of human capital.

Practical implications

This study will create awareness about the value of human capital and its contribution towards improving organisational structural capital.

Social implications

The study contributes to the literature on human capital in accounting and business by focussing on the economic relevance of individual level human capital.

Originality/value

The study contributes to the literature on human capital in accounting and business by focussing on the economic relevance of individual level human capital. It will help create awareness of the importance of valuing human capital at the individual level.

Details

Journal of Intellectual Capital, vol. 19 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

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