Nazli Anum Mohd Ghazali

Ownership structure and corporate social responsibility disclosure: some Malaysian evidence

Purpose – The purpose of this article is to examine the influence of ownership structure on corporate social responsibility (CSR) disclosure in Malaysian company annual reports (CARs).Design/methodology/approach – The study uses a CSR disclosure checklist to measure the extent of CSR disclosure in annual reports and a multiple regression analysis to examine the association between ownership structure and the extent of CSR disclosure in annual reports.Findings – The paper finds that, even among the larger and actively traded stocks in Malaysia, there is considerable variability in the amount of social activities disclosed in corporate annual reports. Results from multiple regression analysis show that, consistent with expectations, companies in which the directors hold a higher proportion of equity shares (owner‐managed companies) disclosed significantly less CSR information, while companies in which the government is a substantial shareholder disclosed significantly more CSR information in their annual re...

Ownership structure, corporate governance and corporate performance in Malaysia

Purpose – Following the 1997 Asian financial crisis, the Malaysian Government introduced new regulations on corporate governance, recognizing the importance of restoring market confidence. The purpose of this paper is to evaluate the impact of the implementation of these new regulations on corporate performance.Design/methodology/approach – Regression analysis was performed to examine factors influencing corporate performance. Ownership structure was represented by director ownership, foreign ownership and government ownership, and corporate governance was proxied by board size and independence. Corporate performance was measured by Tobins Q.Findings – Using data from the year 2001 annual reports of 87 non‐financial listed companies included in the composite index, the results showed that none of the corporate governance variables was statistically significant in explaining corporate performance. Nonetheless, two ownership variables, namely the government as a substantial shareholder and foreign ownershi...

Corporate social responsibility and corporate governance in Malaysian government‐linked companies

Purpose – The purpose of this paper is to investigate whether there has been a change in the level of corporate social responsibility (CSR) disclosure and to determine whether corporate governance attributes influence CSR disclosure in corporate annual reports of Malaysian government‐linked companies (GLCs).Design/methodology/approach – The annual reports of 27 GLCs for two years (2005 and 2007) were analysed using content analysis. Multiple regression analysis was performed to identify factors influencing CSR disclosure in annual reports.Findings – Consistent with expectations, the paired‐sample t‐tests showed that there was an increase (significant at the 1 percent level) in the extent of CSR disclosure. The multiple regression analysis revealed that board size was positively associated and statistically significant (at the 1 percent level) with the extent of CSR disclosure.Research limitations/implications – The regression model reported an R2 of 33.9 percent, which means that almost 66 percent of fact...

Audit committee effectiveness and timeliness of reporting: Indonesian evidence

Purpose - The purpose of this paper is to examine the association between audit committee effectiveness and timeliness of reporting. Specifically, the paper investigates whether there is any relationship between effectiveness of an audit committee and submission of audited financial statements to the Indonesian Stock Exchange (IDX). Design/methodology/approach - Audit committee effectiveness is measured by an index based on the framework developed by DeZoort Findings - The findings show that timeliness of reporting is associated with audit committee effectiveness. This result suggests that audit committee effectiveness is likely to reduce the financial reporting lead time, i.e. the time taken by companies to publicly release audited financial statements to the stock exchange. Research limitations/implications - The audit committee effectiveness index employed in this study was based on DeZoort Practical implications - The findings suggest that audit committee effectiveness is a significant factor ensuring timely submission of audited financial statements. Thus, companies perhaps can re-look into how to further improve audit committee effectiveness in order to enhance timeliness of financial reporting. Originality/value - Unlike the majority of prior studies which investigated the association between the presence/absence of audit committee and timeliness of reporting, this study is one of few which examined the relationship between effectiveness of audit committee and timeliness of reporting in an emerging country.

Intellectual capital disclosure trends: some Malaysian evidence

Purpose – The purpose of this paper is to examine the trend of intellectual capital disclosures (ICD) over a three‐year period (2008‐2010), when the Malaysian business environment was characterized by a number of major events such as the recent 2008/2009 global financial crisis and corporate governance restructuring.Design/methodology/approach – A checklist was constructed to measure the extent and quality of ICD in Malaysian corporate annual reports. The extent of ICD was measured on a dichotomous basis (0, 1) while the quality of ICD was measured using a four‐point scale (0‐3).Findings – The results showed an increasing trend of the ICD and a significant overall increase by the sample Malaysian companies. The results also revealed that there are significant differences between the categories of the IC disclosures, with external capital related information accounting for the largest portion. However, only human capital disclosures significantly increased over time.Practical implications – The time series...

A longitudinal examination of intellectual capital disclosures and corporate governance attributes in Malaysia

Purpose - The purpose of this study is to examine the relationship between intellectual capital disclosure (ICD) and corporate governance attributes following the revised code on corporate governance in Malaysia in 2007. Design/methodology/approach - The sample of the present study was drawn from top companies listed on Bursa Malaysia based on their market capitalization for the years 2008, 2009 and 2010. A self-constructed disclosure index was used to assess the extent and quality of ICDs. The panel data regression analysis was employed to examine the relationship between ICDs and corporate governance. Findings - The results revealed that all corporate governance attributes namely board size, independent directors, board effectiveness and position of the chairman (except family members on the board) were significant in explaining the extent and quality of ICDs in the expected direction. Director ownership was found to be consistent in negatively relating to both the extent and quality of ICDs. Government ownership was marginally significant in determining the extent of ICDs. Practical implications - The findings suggest that the revised corporate governance code has a positive impact on ICD at least in the case of large Malaysian listed companies. This implies that regulatory efforts in enhancing corporate governance in Malaysia is starting to prove fruitful in encouraging companies to be involved in more IC investment and hence disclosure. Originality/value - This paper is one of the few studies which investigate the influence of corporate governance on ICDs longitudinally in a developing country following revision to the corporate governance code in Malaysia in 2007.

Voluntary disclosure in Malaysian corporate annual reports: views of stakeholders

Purpose - The purpose of this paper is to identify “qualitative” factors influencing voluntary information disclosure in annual reports. Design/methodology/approach - Semi-structured interviews were held with twenty-seven market participants in Malaysia to elicit opinions on issues related to voluntary information disclosure. Findings - Analysis of interview responses revealed that factors influencing voluntary disclosure in annual reports include the quality of management, gaining analyst trust and promoting company shares, good news versus bad news, the existence of other channel of communication, governance structure and market forces. Research limitations/implications - Some of the “qualitative” factors identified do not appear to be totally independent from one another. Further work using factor analysis can be an avenue for future research on accounting disclosure. Practical implications - The results also suggest that some companies may be willing to share information to selected interested parties such as analysts during private meetings rather than in a public document such as the annual report. Thus disclosure in a corporate annual report should not be taken as a conclusive measure of a companys extent of voluntary reporting. Originality/value - This paper is one of few studies which adopts an interview approach to identify “qualitative” factors influencing voluntary information disclosure in annual reports.

Corporate governance and voluntary disclosure in Malaysia

The purpose of this study is to examine the relationship between corporate governance and voluntary disclosure. The expectation is that with the introduction of the Malaysian Code on Corporate Governance in 2000, companies would be more aware of the need to have good governance and that good governance would lead to enhanced transparency. Regression analysis was performed on data collected from annual reports for years 2001 and 2006. Consistent with expectation, the extent of voluntary disclosure has increased from 2001 to 2006. The increase was statistically significant at the 5% level. However contrary to expectation, none of the corporate governance variables recommended in the Code was statistically significant.

The influence of a business ethics course on ethical judgments of Malaysian accountants

Purpose – The purpose of this paper is to examine the influence of ethics instruction received during tertiary education on ethical judgments of Malaysian accountants. Design/methodology/approach – Data were obtained through questionnaire survey and analyzed using regression analysis. Findings – A total of 221 respondents representing a 88.4 per cent response rate completed the questionnaire. The regression results show that ethics instruction received during tertiary education have a significant impact on both legal and illegal business scenarios. Accountants also judged an illegal questionable scenario stricter than a legal questionable scenario. Research limitations/implications – The questionnaires were distributed to those firms which participated in the internship programme. Although the firms which participated were of varying sizes, care still needs to be taken in interpreting the results, as representativeness remains an issue in studies of small sample size. Practical implications – The findings...

Factors influencing corporate voluntary disclosures in Malaysia

This study examines factors influencing voluntary disclosures in Malaysian corporate annual reports to see if there has been a change in factors influencing disclosure after the 2007/08 global financial crisis. Multiple regression analyses were run using data from 85 listed companies for the years 2006 and 2009, selected based on systematic stratified random sampling. The quality of disclosure was measured using a self-constructed checklist. A scale of 0–3, depending on how an item is disclosed by the company, was used in awarding scores to companies. Results show that company size to be statistically significant in both years. However, profitability and government ownership which were statistically significant at the 5% and 10% levels respectively in 2006 were no longer significant in 2009. The finding on profitability implies that during times of financial crisis, whether a company is operating profitably or otherwise does not have an impact on voluntary disclosure practices. Additionally, board size was marginally significant at the 10% level in explaining the quality of voluntary disclosure in 2009 while board independence remained insignificant in both years, suggesting that independent directors are not an effective mechanism for enhancing corporate transparency.