Razana Juhaida Johari

Revisited Note on Corporate Governance and Quality of Audit Committee: Malaysian Perspective☆

Abstract The issue of corporate governance has continued to gain widespread prominence in local and international business. Notably, audit committee is a key governance structure charged with oversight over financial reporting and disclosure that requires the audit committee members to be critically aware of and fully understand their oversight responsibilities. In recent years, interest in audit committees has increased dramatically, with a specific emphasis on member independence, experience and knowledge. This paper discusses on the corporate governance and audit committees’ qualities and some reviews on the recent literature relating to the most cited audit committee qualities i.e. audit committees composition and communications. Finally, this paper also identifies the suggestion made for the betterment of audit committee practices in Malaysia.

Money Laundering and Terrorist Financing: Real Global Cases, Behavioural Theories and Internal Control Mechanism

Money laundering is a process to make ‘dirty money’ appear to be clean. The money laundering activities affect not only the criminal justice systems, but they also have the capacity to destabilise financial institutions and financial systems. While illustrating the five real global cases which are involved in money laundering and terrorist financing, this paper also discusses the criminal behavioural causation theories as to reasonably analyse the behavioural aspect of the perpetrators. Notably, the main cause for the recent hike in money laundering and terrorist financing offences is due to leakages in internal control. Thus, a few possible weaknesses from the internal control mechanisms are highlighted as to give a clearer picture on this issue. Finally, this paper also includes some discussions on the proposed mitigation risk mechanisms as to improve effectiveness and good governance towards the implementation of policies and regulation on money laundering and to counter the terrorist financing.

Assessment of management commitment in Malaysian public sector

Abstract Currently, the public sector is a matter of global concern due to the constant cases of failures in governance, fraud, inefficacy, and corruption. Management commitment is a critical issue as lack of it could lead to failures in governance, fraud, inefficacy, corruption, as well as weak financial management, particularly in the public sector. This study evaluated the state of present practices of management commitment among public-sector employees in Malaysia. Primary data were collected using a questionnaire survey from 194 heads of departments in the Malaysian federal ministries. The collection of data was in accordance with the perspective of 10 factors in management commitment practices, using a 5-point Likert scale. Factor analysis and descriptive statistics were utilized for data analysis. In addition, data reliability was checked by Cronbach’s alpha test, data normality was examined by skewness and kurtosis tests, and data validity was tested by using Kaiser–Meyer Olkin test and Barlett’s test. The findings show that 97% of the participants reported that they practised management commitment within their departments. Nevertheless, the priority for these management commitment factors varied according to the service schemes. In general, management commitment practice was the highest within the groups that used the finance scheme and the lowest among the employees who were under the accounting and audit schemes. The result of the study will help policy makers to take the necessary steps to improve the practices of management commitment in the public sector in order to create a more dependable and efficient public sector in Malaysia.

The Effects of Internal Control System, Financial Management and Accountability of NPOs: The Perspective of Mosques in Malaysia

Abstract This study examined the effectiveness of internal control system, financial management and accountability practices of mosques in Malaysia. Based on 500 questionnaires was administered to chairman and treasurer of 250 selected mosques available in Malaysia including Sabah and Sarawak. This study suggests that a proper and accurate recording of financial transaction, enhancing the accountability of chairman and treasurer in order to improve the productivity and performance effectiveness. The inclusion of these variables provides important implications for expanding our understanding of financial management practices in non-profit organizations and creating new research opportunities. The result provides on how Malaysian mosque enhances internal control system and performance to achieve the mission and goals of mosque. An effective way to improve the productivity and efficiency of financial management practices and management control system in the mosque.

Malaysian DNFBPs’ Perceptions on Awareness, Perceived Impact and Views on the AML/CFT Requirements☆

Abstract Money laundering and terrorism financing (ML/TF) continues to be an on-going threat which has the potential to adversely affect the countrys reputation and investment climate which may lead to economic and social consequences. A 2004 amendment to the Anti-Money Laundering and Anti-Terrorism Financing Act (AMLATFA), 2001 has redefined “Reporting Institutions” (RIs) to include accountants, auditors, lawyers and other selected professionals. Previous studies on the AML/CFT in Malaysia (e.g. Mohamed & Ahmad, 2012 and Shanmugam & Yhanasegaran, 2008) in general did not specifically address the issue of DNFBPs’ awareness, perceived impact and views on the AML/CFT requirements. Our study is the first in our knowledge to evaluate the understanding on the AML/CFT requirements in Malaysia from the perspective of the accountants.

The Influence of Governance Mechanisms and Fraud Incidences on Perceived Ethical Culture in Malaysian Companies

The importance of ethical culture concerns with the choices exercised by the workers in the organizations in terms of decisions and actions. There are no standard definitions for ethical decisions and actions, but some choices are considered to be ethical by virtue of the goodness meted out for the society at large. Businesses that are managed in an ethical manner are much more likely to be characterized by a positive ethical culture of good governance, internal control, and risk management. These are critical components for governance mechanisms. There are minimal past studies that have examined the influence of various types of governance mechanisms towards ethical culture. Furthermore, apart from governance mechanisms, fraud incidences could have influenced the level of ethical practices adopted in an organization. Hence, this chapter will study the influence of internal controls, corporate governance, risk management, and firm’s fraud practices towards ethical culture in Malaysian companies. The findings of this study is hoped to offer some interesting feedbacks to Malaysian companies in formulating their ethical policies and strategies.

Mitigating Money Laundering: The Role of Designated Non-financial Businesses and Professions in Southeast Asian Countries

Money laundering (ML) is a process to make “dirty money” appear to be clean. The Asia/Pacific Group on Money Laundering (APG) was established in Bangkok, Thailand, in 1997 through an initiative by the “Financial Action Task Force (FATF) Asia Secretariat” in 1995. Its primary objective was to obtain wide regional commitment to implement anti-money laundering (AML) policies and initiatives and secure agreement to establish a more permanent regional anti-money laundering body. The role of APG is to combat money laundering and the financing of terrorism in the Asia/Pacific region. This paper examines the compliance to FATF Recommendations into national legislation of ten Southeast Asian countries in relation to the role of professionals such as accountants, lawyers and company secretaries. These professionals are known as “designated non-financial businesses and professions” (DNFBPs). The paper suggests some recommendations that are considered vital in combating money laundering activity.