Nor Asma Lode

Pension accounting disclosures and stock market reactions

The Malaysian Accounting Standard Board ‘MASB’ issued FRS 119 ‘Employee Benefits’ which became effective for periods beginning on or after 1 January 2010. This standard is further superseded by MFRS 119 (i.e. as amended by IASB in June 2011) with effect from 1 January 2013. Hence, the present study provides evidence on the practice of pension accounting disclosures after the implementation of FRS 119 ‘Employee Benefits’ and their stock market reactions ‘cumulative market adjusted return’. The study reveals that seventy (70) companies have adopted Defined Benefit (DB) pension schemes based on the annual reports for the year 2009. Among these companies, seven (7) companies have pension assets disclosures while another 63 companies pension liabilities disclosures. The pension accounting disclosures related to actuarial gains and losses are only provided by 29 Malaysian companies. In addition, multivariate analysis provides interesting results that indicate pension liabilities disclosures are significant variables in relation to CMAR. These findings may suggest that DB pension schemes with high disclosures of pension liabilities are less likely contributing to high value of CMAR. In this context, the users of corporate financial statements could be expected (1) to value the amount of pension liabilities more than amount of pension assets among DB pension schemes adopters; and (2) higher amount of pension liabilities may result in lower CMAR among DB pension schemes adopters in Malaysia. On the other hand, pension assets disclosures which are positively and significantly associated to CMAR indicate that the higher of pension assets disclosed in by DB pension adopters in the financial statements, the higher of CMAR will be offered by Malaysian listed companies. These disclosures of pension asset could help the aging population in planning the retirement needs in the future. In addition, users of financial statements may be worth to be attentive and wacthful in relation to the amount of pension assets which are disclosed in the annual reports in order to make decision on buying and selling of company securities.

The communication of Islamic information by Shariah-compliant companies in Malaysia

An increase of information consciousness about Islamic related activities among Muslim community motivates this study to investigate the status and determinants of Islamic information disclosed by Shariah-compliant companies in Malaysia.This study finds that Malaysian companies are interested to release information about saddaqa/donation, the safety/quality of the product, preservation of environment and safety workplace.However, Malaysian companies are reluctant to inform their stakeholder about zakat, waqf and the halal status of their products.This study also indicates that female directors and the proportion of Muslim directors influence the communication of certain Islamic information in the annual report.

Impact of voluntary disclosure on earnings management in Malaysian companies: A proposed analysis

Voluntary disclosure is considered as an important item of financial reporting. Therefore, the leading companies around the world voluntarily disclose an extensive amount of business information that appears to be useful in communicating information to investors, but some managements may use voluntary disclosure to mislead stakeholders about the underlying economic performance. The planned study will contribute to increase awareness about the importance of voluntary disclosure to the regulatory authorities in Malaysia in order to improve the quality of the disclosure. It also identifies in detail the impact of all aspects of voluntary disclosure on earnings management, where prior studies mentioned that there is a possible relationship between voluntary disclosure and earnings management. The sample of companies for this proposed study will be from the Malaysian companies listed on the main board of Bursa Malaysia. The proposed study will use checklist instrument to measure the extent of voluntary disclosures in three aspects: (1) strategic information; (2) financial information; and (3) non-financial information. Also it will use discretionary accruals measures as proxies to evaluate earnings management. The paper proposes ordinary least square (OLS) for identifying the possibility impact of voluntary disclosure on earnings management.