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This paper aims to examine cases of fraudulent financial reporting (FFR) which were subject to published enforcement actions by the Securities Commission Malaysia (SC) from 1998 to 2012 for reasons of alleged financial misreporting. It investigates the main attempts used (how) and sensible motives (why) for these fraudulent reporting.

This study undertakes a close examination of the financial reports manipulated – annual accounts, interim reports and financial reports in listing proposals, initial public offering prospectuses and corporate restructuring proposals. Due to the limited number of FFR published, a close examination of these cases is the best way to reach a more comprehensive and detailed understanding of “how” FFR takes place, rather than performing large sample statistical analyses. This study also collects data which provide evidence for the possible motivations in resorting to the FFR.

The most common attempt used by the sample companies was to overstate their reported revenue by recognising fictitious sales from bogus customers. Sample companies who attempted this initial manipulation often followed with consequential manipulations and in some cases also embarked on masking manipulations. Sensible motives for the sample companies to manipulate their financial statements include capital raising exercises, closeness to defaulting on debt repayments and sustaining equity overvaluations.

The primary limitation of this study is its lack of breadth due to the limited number of reported cases available. Moreover, taking the sample companies used from enforcement action releases published by the SC presupposes that the SC has diligently and correctly identified all the FFR cases – whereas there is a possibility that some companies involved in FFR may not yet have been detected or publicly revealed. Notwithstanding these limitations, our findings provide a comprehensive insight, which is sufficient in depth, into the operational aspects of FFR in Malaysia.

One practical lesson from the findings on “how” within the chain of manipulations is that auditors ought to review the effectiveness of their analytical and substantive procedures, as a number of the FFR cases remained undetected by the audit process. A second is that accounting standards setters may wish to reconsider the amount of discretion given to managers in financial reporting. On the one hand, some managers have used this discretion to provide useful information to the market; however, others have opportunistically used it for personal gain.

From the societal perspective, it is time for managers, as agents of capital providers, to self-review their responsibilities and stewardship in financial reporting. There needs to be a paradigm shift in their attitudes towards the perceived incentives of, and opportunities for, FFR. Managers’ wrongdoings in these accounting scandals have had significant adverse consequences for society – including minority shareholders, investor confidence, future accountants and managers in the making.

This study provides direct and practical evidence on the “how” and “why” of FFR in the context of a developing country – Malaysia. Such evidence is limited in the existing literature and relevant to practitioners.

This study examines the stakeholder perception of the sustainability risks, challenges and benefits arising from managing these risks in the Singapore construction industry.

A questionnaire consisting of 89 risk factors, challenges and benefits, was administered, with 216 responses received from various stakeholders. Regression analyses were used to estimate the relationships between sustainability and business risk factors, challenges and benefits associated with business sustainability practices.

Stakeholders recognise the importance of the emerging sustainability risk factors, and indeed rank these almost on a par with conventional business risk factors. The inherent business risks determine the nature of sustainability risk factors for construction firms, which in turn can affect their business risks and the performance and value creation of firms. However, most stakeholders, while acknowledging that business sustainability practices can provide benefits as well as posing challenges, do not believe that they can derive net benefits from such practices.

Through this perception study, there is an urgent need to turn the existing awareness of the importance of business sustainability (BS) practices into more consistent and solid actions among construction firms in Singapore.

This study’s results imply construction firms to incorporate BS practices more systematically into their business strategies and operations, and to include sustainability risk factors alongside conventional business risks in their risk registers and risk management frameworks.

This study consolidates various variables and constructs of BS matters in the literature and practice into a meaningful framework for the management of BS in the construction industry.

The purpose of this paper is to answer the fundamental question about why the shares of property developers are traded at market discounts by focusing on property developers from Hong Kong, Malaysia and Singapore.

It measures market discount using market-to-book ratio (MTB) and specifies the relations between MTB and the hypothetical determining factors (revenue recognition policy, investment property measurement policy, related party (RP) transaction disclosures and economic rent) in the presence of relevant control variables.

This study finds that aggressive revenue recognition and investment property measurement policies increase market discounts, but that RP transactions generally contribute positively to reduce the market discounts of property developer shares. Specifically, RP transactions are value-enhancing only if property developers adopt a conservative revenue recognition policy, because markets sensibly see RP transactions that are part of an aggressive revenue recognition policy as earnings management for tunnelling by controlling shareholders, and hence react with discounts. It is also observed that when property developers generate insufficient profit to cover their cost of equity, this generally leads to their shares being traded at market discounts. However, an aggressive revenue recognition policy can reduce market discount if early recognition contributes positively to economic rent.

This study provides valuable evidence of the economic consequences (market discounts) of accounting choices on recognition and measurement, and the disclosure of accounting information. This is crucial to managers of property developers in managing their firm values when exercising accounting discretion.

This study provides empirical evidence on market discounts as they relate to property developers, which has been limited (past studies focus on property investment companies and real estate investment trusts).

This study proposes an alternative perspective on why firms issue convertible debt, to supplement the largely theoretical motives identified in the existing literature. It hypothesises that the separate presentation of convertible debt into its equity and liability components has economic consequences and advantage that explain why firms issue convertible over non-convertible debt, consistent with the debt covenant hypothesis. The purpose of this paper is to address the proposed perspective and hypothesis.

Data on convertible debt, gearing (debt assets and debt equity), debt issuance and retirement, etc. were collected for a sample of 1,104 firms listed on Bursa Malaysia. Regression analyses were then used to assess the hypotheses on how gearing affects the use of convertible debt and the impacts of its use on changes in gearing over the financing cycle.

Firms with higher gearing, and possibly those close to violating debt covenants, are more likely to issue convertible than non-convertible debt. In addition, the use of convertible rather than non-convertible debt both reduces the increase in gearing when debts are issued and leads to a larger decrease in gearing during debt retirements via conversion.

These effects on gearing provide firms with additional financial flexibility and enhance firms' capacity to borrow more from other sources, a lower-debt advantage.

This study demonstrates the informational role of financial reporting in addressing the stewardship emphasis, as part of the decision usefulness objective of financial reporting in the Conceptual Framework for Financial Reporting.

This study aims to examine the economic consequences of, and managerial behaviour in response to, the introduction of IFRS 16 Leases. It extends the debt covenant hypothesis to explain why firms reduce the use of operating leases with the introduction.

This study develops a model, based on operating leases as an alternative financing source and the determinants of debt policy, to estimate the effects of gearing on operating lease intensity. High gearing is a proxy to probably closer to the violation of, or expected to violate, the gearing restriction in debt covenants given the retrospective capitalisation of operating leases, when IFRS 16 takes effect.

This study finds that operating lease intensity fell between 2011 (immediately after the first exposure draft leading to IFRS 16) and 2018 (immediately prior to the effective date of IFRS 16). It also finds that gearing affects changes in operating lease intensity over 2011 and 2018, consistent with the debt covenant hypothesis.

The introduction of IFRS 16 is a natural experiment with unique characteristics (the active lobbying behaviour, ex ante evidence on adverse economic consequences, a prolonged standard-setting period, etc.) valuable for accounting research.

A showcase about the relevance of financial reporting for contracting interests of firms and managers and a good reference for accounting standard setters in considering and managing the economic consequences of proposed accounting standards.

This study adds to the limited research on the consequences of accounting standards and documents the ex-post impact on firm leverage ratios and the behavioural aspects of reporting entities.

This study examines (1) the extent of key audit matters (KAMs) reported by auditors is related to accounting estimates, (2) whether measurement uncertainty and management bias affect auditors to do so and (3) whether the use of accounting estimates, given the measurement uncertainty and management bias reported in KAMs adversely affects the decision usefulness of accounting information.

Data on key audit matters, accounting estimates, measurement uncertainty, management bias, etc. were collected from the auditor's reports of 351 sample Chinese listed firms. It employs regression analyses to assess the hypotheses on issues affecting the report of these key audit matters and the impacts on the decision usefulness of accounting information.

Fair value and impairment loss estimations make up of 2.6 and 44.1% of the 606 KAMs identified, respectively. Measurement uncertainty is positively, while management bias is negatively, affecting auditors report KAMs related to accounting estimates. The use of accounting estimates in firms where their auditors reported the KAMs related to accounting estimates does not enhance the value and predictive relevance of reported earnings. The assurance works on, and reporting of, KAMs served as a “red flag” about the accounting estimates.

The use of accounting estimates does not always lead to enhanced decision-useful accounting information. Auditors, in their stewardship role, shall ensure that the measurement uncertainty issue is appropriately identified, addressed and verified. In addition, they shall provide an effective check-and-balance to the accounting discretion managers have in providing decision-useful information from opportunistic reporting.

This study examines the proposition that while the use of estimates can enhance the decision usefulness of accounting information, it can also induce measurement uncertainty and management bias into financial reporting.

This article discusses the reasons and discourses adopted by the Hong Kong Special Administrative Region Government (Hong Kong SAR Government), with Mr Tung Chee Hwa as the Chief Executive, in preparing young people to become more mature and responsible. In the Hong Kong context this means they should be willing to fulfil community obligations and opt for consultation rather than confrontation should individual or community rights be sought. Confucianism, named after Confucius (551‐479 BCE), has been and still is a vast and complicated system of philosophies, morals, rituals, and ideas, which for well over 2,000 years has informed and inspired the thinking and practice of countless people in Chinese societies and Asian countries in all important areas, including the economy and the polity (Tu, 1998a; Berthrong & Berthrong, 2000; Yao, 2002). Put simply, the goal of Confucian life is to create a peaceful world, with its ethical emphasis placed on the cultivation of the self and the promotion of harmonious and respectful relations with other people in different spheres of human activities.

The purpose of this paper is to assess the intra-party conflicts in Hong Kong’s Democratic Party (DP) and their implications for broader democratic processes in the territory. It also examines some other thematic issues including: the party’s policy decision-making process, candidate selection, party membership and mergers, and their overall relevance for democratisation in Hong Kong.

The study gives a historical review of intra-party conflicts. The concept of factionalism is applied to better understand the DP in Hong Kong’s political space.

Hong Kong is unique and popular models of party conflicts are hardly applicable to the country. Intra-party conflict is an obvious, expected conflict because of differences in formation, leadership, manifestoes and ideologies. The present author tries to examine the case with a view to making a novel contribution.

The study of political factionalism is not uncommon in Hong Kong but this paper intends to study intra-party elite conflicts and self-democratisation of the Hong Kong DP as a case study which is seldom addressed. Consolidation is a possible scenario and its presence is evident when political elites increasingly demonstrate commitment towards creating a democratic regime and when they hold strong beliefs in democratic procedures and institutions as crucial to governing public life.

Examines the extent to which social policy adopted by the colonial government in Hong Kong (prior to its hand‐over China in 1997) has set the agenda for the government of the newly formed Special Administrative Region (SAR). Chronicles the historical development of social policy in Hong Kong since the inception of the colonial government in 1842; identifies that, with the exception of a short‐lived period of expansionism (stimulated by social unrest in the mid‐1960’s) social welfare provision appears to have been low on the government’s agenda and incremental in nature ‐ the emphasis being on economic growth, rather than public spending on welfare programmes. Examines the strengths and weaknesses of this incremental approach; outlines the commitment of the SAR government to the market economy and its proposals for a modest increase in welfare provision, essentially building on the legacy left behind by the colonial government.