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Article
Publication date: 3 October 2016

Emie Famieza Zainudin and Hafiza Aishah Hashim

The main aim of this study is to analyse the financial ratio (i.e. financial leverage, profitability, asset composition, liquidity and capital turnover ratio) in detecting…

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Abstract

Purpose

The main aim of this study is to analyse the financial ratio (i.e. financial leverage, profitability, asset composition, liquidity and capital turnover ratio) in detecting fraudulent financial reporting (FFR).

Design/methodology/approach

The logit model was used to identify firms that are related to FFR. The sample firms that engage in fraudulent reporting were obtained from the media centre of Bursa Malaysia. The firms were selected based on their contravention of the Listing Requirements of Bursa Malaysia Securities Berhad. The data cover a period of seven years from 2007 to 2013.

Findings

The results suggest that financial leverage, asset composition, profitability and capital turnover were significant predictors of FFR.

Practical implications

The findings of this study may assist investors in making decision for their investments.

Originality/value

This study describes firms that breach the Listing Requirements of Bursa Malaysia Securities Berhad using the financial ratio.

Details

Journal of Financial Reporting and Accounting, vol. 14 no. 2
Type: Research Article
ISSN: 1985-2517

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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. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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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

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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

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Article
Publication date: 11 October 2021

Waleed M. Al-ahdal and Hafiza Aishah Hashim

The purpose of this paper is to analyse the influence of audit committee characteristics and external audit quality on the performance of non-financial public limited…

Abstract

Purpose

The purpose of this paper is to analyse the influence of audit committee characteristics and external audit quality on the performance of non-financial public limited companies listed on the National Stock Exchange 100.

Design/methodology/approach

One-way random effect panel data regression was applied to 74 non-financial firms in the Nifty 100 from 2014 until 2019. The overall audit committee index and external audit index were built based on the new Indian Companies Act, 2013 and on a review of the literature to capture the impact of the new Act on firm financial performance.

Findings

The outcome of the study revealed that there is lack of evidence to show that audit committee characteristics improve the performance of top Indian non-financial listed firms. However, external audit quality was found to have a significant positive impact on the financial performance of firms as measured by Tobin’s Q, while firm size and leverage were found to have a significant impact on the financial performance of firms as measured by return on assets and return on equity.

Practical implications

This paper will be greatly beneficial for financial practitioners and policymakers because it provides practical suggestions and recommendations about the types of external audit that are indispensable for the overall effectiveness and performance of firms. The study findings may also aid strategic policy formulation and execution for better corporate governance practices for the purpose of profit and wealth maximisation.

Originality/value

To the best of the authors’ knowledge, to date, no previous research has evaluated the effects of audit committee features and external audit quality on the financial performance of firms in India after the implementation of the new Companies Act, 2013. Hence, this study fills this void in the present literature by examining the overall features of the audit committee and external audit and their impact on firm performance in the setting of India.

Details

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

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Article
Publication date: 24 June 2020

Hafiza Aishah Hashim, Zalailah Salleh, Izzati Shuhaimi and Nurul Ain Najwa Ismail

A number of highly publicised scandals such as Enron, Lehman Brothers, Parmalat, Satyam, Toshiba and 1MDB (to name a few) have heightened the awareness of the effects of…

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Abstract

Purpose

A number of highly publicised scandals such as Enron, Lehman Brothers, Parmalat, Satyam, Toshiba and 1MDB (to name a few) have heightened the awareness of the effects of fraudulent financial reporting. While enormous measures have been taken to curb the fraudulent activities among large and small businesses, the issues are still alarming worldwide. Thus, this study aims to explore the extent to which the prevalence of fraud risk in state-controlled companies and to enhance understanding of the underlying reasons of the fraudulent activities.

Design/methodology/approach

As this study is a descriptive and exploratory in nature, an exploratory case study method was used in four state-controlled companies. Using the fraud triangle theory to underpin this study, the qualitative face-to-face interviews were carried out with top management of the companies.

Findings

The study reveals a high risk of fraud occurrence at state-controlled companies that involve dealing with various suppliers, governments, customers and shareholders, even when standard operating procedures and rules and regulation are in place. The apparent reason for this phenomenon is attributed to not only opportunities but also incentives and rationalisations in engaging fraudulent activities.

Originality/value

As there are relatively few qualitative studies conducted in this area specifically among Malaysian state-controlled companies, this study extends the fraud literature by examining risk exposure and reasons underlying the fraudulent activities. The findings demonstrate that to a certain extent, the fraud triangle theory explains the motivations behind the fraudulent activities. The finding from this study is relevant to regulators, investors, companies and academicians in understanding, preventing and combating fraud.

Details

Journal of Financial Crime, vol. 27 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 26 October 2021

Rohaida Seno, Hafiza Aishah Hashim, Roshaiza Taha and Suhaila Abdul Hamid

The purpose of this paper is to determine whether Hofstede’s cultural dimensions have a significant relationship with ethical decision-making among tax practitioners while…

Abstract

Purpose

The purpose of this paper is to determine whether Hofstede’s cultural dimensions have a significant relationship with ethical decision-making among tax practitioners while performing their duties in ensuring tax compliance among taxpayers.

Design/methodology/approach

A structured questionnaire was used to collect data from tax practitioners in the state of Terengganu, Malaysia. Two hundred questionnaires were distributed via Google Forms and email to tax practitioners who were selected from the Inland Revenue Board of Malaysia website using a mixture of systematic random and snowball sampling approaches. The Statistical Package for Social Sciences software program was used to analyse the collected data.

Findings

The results show that power distance (PD), individualism (IND) and uncertainty avoidance (UAV) have a significant relationship with ethical decision-making, whereas masculinity (MAS) has no significant relationship with ethical decision-making among tax practitioners while carrying out their duties. The positive relationship of PD and of IND with decision-making behaviour indicates that ethical decision-making is highly practised in a low PD and low IND culture rather than in a high PD and high IND culture. In contrast, UAV shows a negative beta sign, which indicates that tax practitioners tend to practise ethical decision-making in a high UAV culture.

Originality/value

This study fills a gap in the literature in regard to the influence of culture on tax compliance particularly among tax practitioners in Malaysia. The study shows how culture is related to the decision-making practices of tax practitioners while performing their role as an intermediary between their clients and the government. It is worthwhile to examine the decision-making of tax practitioners because the results of such an examination not only provide some insights into the professional practices of accountants that will be of interest to the relevant authorities such as the Malaysian Institute of Accountants, they also offer some information that will be of assistance to higher learning institutions in formulating accounting programmes to produce the future generation of accountants.

Details

Asian Review of Accounting, vol. 30 no. 1
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 14 June 2021

Emie Famieza Zainudin, Hafiza Aishah Hashim and Shahnaz Ismail

This paper aims to examine the effect of the imposition of public reprimands on the underlying stock prices of companies in Malaysia.

Abstract

Purpose

This paper aims to examine the effect of the imposition of public reprimands on the underlying stock prices of companies in Malaysia.

Design/methodology/approach

Data on 148 companies that received public reprimands during the period from 2007 to 2013 were collected from the Bursa Malaysia website to analyse the market reactions to the imposition of public reprimands.

Findings

Based on a market model of abnormal returns, the empirical result showed that the imposition of a public reprimand had a negative impact on a company’s stock price. Moreover, when a market model of average abnormal returns (AAR) was used, the result indicated that companies that had received a public reprimand had a negative AAR value.

Research limitations/implications

The findings from this study have implications for shareholders in making their investment decisions because they can switch their investments to other companies and markets after a company in which they are interested or have made an investment has received a public reprimand.

Originality/value

There is limited research on the imposition of public reprimands and the effect that it has on companies in developing countries. Hence, this study contributes to research in this area by providing evidence on the effect of public reprimand on stock price reactions in the context of a developing country, namely, Malaysia.

Details

Journal of Financial Crime, vol. 28 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 3 August 2021

Ahmad Yuosef Alodat, Zalailah Salleh, Hafiza Aishah Hashim and Farizah Sulong

This study aims to assess the effect of director board and audit committee attributes and ownership structure on firm performance. In general, resource dependency and…

Abstract

Purpose

This study aims to assess the effect of director board and audit committee attributes and ownership structure on firm performance. In general, resource dependency and agency theories have underlined the superior performance of firms equipped with stronger Corporate Governance (CG) versus those of deficient governance. Concurrently, the study delineated the provisions of ownership structure provision, specifically foreign ownership and institutional ownerships, thus describing the component denoting the structural significance in explicating firm performance.

Design/methodology/approach

The current study implemented an empirical approach involving the construction of extensive CG measures thus, subjected to 81 non-financial firms listed on the Amman Stock Exchange spanning the period of 2014–2018.

Findings

The current study identified the positive and significant relationship between the board of directors and audit committee characteristics with the firm performance measures tested, namely, return on equity (ROE) and Tobin’s Q. In terms of ownership structure, both foreign and institutional ownerships yielded a significant and positive relationship with ROE. Meanwhile, Tobin’s Q led to an insignificant and negative relationship between both ownership types and firm performance measures.

Practical implications

The analytical outcomes substantiate the possibility of enhanced performance shown by growing global firms because of the implementation of CG mechanisms, specifically because of the practices resulting in minimised agency costs.

Originality/value

The current study offers novel evidence detailing the impact of CG effectiveness towards performance and its implementation in emerging markets following the minimal amount of scholarly efforts on the topic. It is a timely contribution towards the current understanding of the relationship linking governance and performance for the purpose of ensuring the adoption and imposition of a strong corporate governance code by the government.

Details

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

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Article
Publication date: 4 November 2020

Noorul Azwin Md Nasir and Hafiza Aishah Hashim

This paper aims to review the performance of corporate governance practices in Malaysia from the beginning of the 21st century until recently. This paper also highlights…

Abstract

Purpose

This paper aims to review the performance of corporate governance practices in Malaysia from the beginning of the 21st century until recently. This paper also highlights the history of corporate governance practices in Malaysia and the country’s financial statement fraud situation.

Design/Methodology/Approach

Malaysia is a multi-ethnic society that requires managing corporations and firms collectively. Hence, corporate governance practices and good practices are compelled to fit society’s uniqueness. This paper used the survey findings generated from the Corporate Governance Watch Report (CG Watch Report) by the Credit Lyonnais Securities Asia and the Asian Corporate Governance Association from the year 2002 to the year 2018 and discussed the corporate governance performance related to financial statement fraud in Malaysia. The market ranking survey oversees five categories of corporate governance scores: rules and regulations, enforcement, political/regulatory environment, adoption of International Generally Accepted Accounting Principle and corporate governance culture

Findings

The findings reported that firms in Malaysia have benefited from good laws and regulations through corporate governance reforms.

Practical Implications

This study’s findings are relevant to regulators, board members, shareholders, potential investors, analysts and others to produce more informative timely comparisons. Future research should consider analysing and comparing the corporate governance performance in Malaysia with the corporate governance performance of other countries in Asia.

Originality Value

This study summarized the findings generated from a periodical CG Watch Report from the year 2003 to 2018. This study also underlined the actions of responsible agencies and regulatory bodies determined to have a decent corporate governance practice in Malaysia, especially in minimizing financial statement fraud occurrence in the country.

Details

Journal of Financial Crime, vol. 28 no. 3
Type: Research Article
ISSN: 1359-0790

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