Zaleha Abdul Shukor

Risk management disclosure

Purpose - – The purpose of this paper is to examine the effect of voluntary risk management disclosure (VRMD) on firm value (FV). Design/methodology/approach - – This study uses content analysis approach to collect the VRMD data. FV is represented by three variables: market capitalization, Tobin’s Findings - – Based on the regression analysis, this study found that the VRMD has a positive and significant relationship with FV. Even though the authors hypothesize that damaging voluntary risk management disclosure (DVRMD) will have a negative and significant relationship with FV, the regression analysis shows that the DVRMD is not significantly related to FV. As expected, the relationship between beneficial voluntary risk management disclosure (BVRMD) and FV is positive and significant. The findings provide evidence that should be of interest especially to firms in terms of deciding upon whether to provide or avoid disclosing voluntary risk management information to their stakeholders. Research limitations/implications - – Notwithstanding the critical empirical findings, this study is limited to only focusing on a one year data. The authors acknowledge the fact that findings from a one year data might not be easily generalized to other time periods. The authors believe a stronger argument could be obtained from evidence based on a longitudinal study or data that incorporate multiple economic conditions. The study highlights the fact that risks management information is important to investors in Malaysia when they make their investments decisions. Practical implications - – To date, regulatory bodies emphasize more on financial risk management disclosure through the enforcement of MFRS 7; while non-financial risk information is less emphasized in current guidelines such as Malaysian Code on Corporate Governance (MCCG) (2012) and Recommended Practice Guide 5 (Revised), which only requires firms to disclose information about non-financial risk management without specific details. As this study has provided evidence on the significance of non-financial risk management disclosures in the capital market, this study could be useful for the regulatory bodies to develop more detailed guidelines on non-financial risk management disclosure in the future. Originality/value - – Most of prior literatures are found to focus on the study of factors that influence the VRMD (such as Linsley and Shrives, 2006; Abraham and Cox, 2007; Hassan

Tangible and intangible non-current assets: Evidence of information content during economic crisis period

In this paper, we investigate the information content of non-current assets (NCA) among firms listed on the main board of Bursa Malaysia. Specifically, we investigate the information content of tangible and intangible NCA during the economic crisis period of 1997–1998. Our empirical analysis uses time-varying and fixed effects models for the period 1995–1999. We measure information content based on the association of analysts’ earnings forecasts errors (AFE) with both capitalized tangible and intangible NCA. We find evidence of higher information content in tangible NCA compared to intangible NCA during the Asian economic crisis period of 1997–1998. Our evidence is consistent with the assumption that tangible assets are more reliable compared to intangible assets for prediction of expected cash flows during economic crisis periods.

Pendapatan Komprehensif dan Nilai Firma: Peranan Jawatankuasa Audit

Maklumat pendapatan komprehensif lain (PKL) adalah maklumat pendapatan yang masih belum direalis namun tetap dilaporkan dalam penyata pendapatan firma. Maklumat PKL menjadi kontroversi kerana ianya sentiasa berubah, menjadikannya tidak stabil dan yang lebih kritikal adalah ianya belum direalis. Namun terkini di mana nilai saksama adalah keperluan pelaporan kewangan, maklumat PKL telah wajib dilaporkan agar pihak berkepentingan mengetahui nilai sebenar syarikat. Maka untuk meyakinkan pihak berkepentingan akan kebolehpercayaan kepada maklumat PKL ini, syarikat perlu kepada tadbir urus yang mantap termasuklah mempunyai jawatankuasa audit (JA) yang bertanggungjawab memastikan kebolehpercayaan maklumat PKL tersebut. Kajian ini meneliti peranan jawatankuasa audit (JA) di dalam hubungan antara pelaporan maklumat PKL dan nilai firma. Peranan JA dilihat secara komprehensif dan diukur menggunakan indeks keberkesanan JA yang meliputi empat dimensi iaitu komposisi, bidang kuasa, sumber daya dan ketekunan. Sampel kajian adalah 1,136 pemerhatian tahun-firma untuk tiga tahun yang terdiri daripada firma yang tersenarai di Bursa Malaysia dari tahun 2011 sehingga 2013. Data dikutip daripada pangkalan data Datastream dan laporan tahunan syarikat. Keputusan kajian menunjukkan bahawa PKL mempunyai kemampuan untuk berhubung secara positif dengan nilai firma. Manakala JA pula mempunyai tanda-tanda mampu mengukuhkan hubungan antara pelaporan PKL dan nilai firma bagi sampel kajian ini. Dapatan kajian diharap dapat memberi bukti kepada MASB dari segi kebergunaan MFRS 101 yang berkait dengan pelaporan pendapatan komprehensif dan Suruhanjaya Sekuriti Malaysia dari segi manfaat fungsi JA dalam MCCG. Information on other comprehensive income (OCI) is information on income which is still unrealized and yet have to be reported in the firms’ income statement. OCI information becomes controversial because it is always changing making it unstable and more critical is the fact that it is still unrealized. Nevertheless, since currently reporting at fair value is a requirement in financial statements, OCI information must be reported to assist stakeholders in assessing firms’ real value. Hence, in order to convince stakeholders on the reliability of OCI information, firms need a strong governance which include a responsible audit committee to ensure the reliability of the OCI information. This study investigates the role of audit committee (AC) in the association between reporting of OCI information and firm value. The role of AC is examined comprehensively and measured using the AC effectiveness index which include four dimensions, that is, composition, authority, resources and diligence. Our sample is 1,136 firm-years data from firms listed on Bursa Malaysia between 2011 until 2013. Data was collected from Datastream database and firms’ annual reports. Our findings show that OCI has the tendency to be positively associated with firm value. While, AC also shows potential to strengthen the association between OCI reporting and firm value for our sample firms. Our results should provide important evidence to MASB in terms of the usefulness of MFRS 101 with regards to the reporting of comprehensive income and to the Securities Commission of Malaysia in terms of the benefits of AC function in MCCG.