www.maref.org.my VOLUME 1 ISSUE NO 2 2010-2011 KDNPP ...

maref.org.my

www.maref.org.my VOLUME 1 ISSUE NO 2 2010-2011 KDNPP ...

VOLUME 1 ISSUE NO 2 2010-2011KDNPP 17376/04/2012 (029683)MALAYSIAN ACCOUNTANCY RESEARCH AND EDUCATION FOUNDATIONwww.maref.org.my


ContentsFeature• Stress at Work Amongst Auditors: 1Is There a Light at the End of the Tunnel?• Students’ perception on a career as 4a chartered accountant• Corporate Social Responsibility: 6Business Strategy Towards Value Creation• Environmental Tax Laws in Malaysia Today 9InTouchThe Changing Phase 11Foundation NewsMAREF Activities 12Winners for the 3rd Malaysian Outstanding 13Research Paper Award 2009Board of TrusteesY.Bhg. Datuk Dr. Abdul Samad AliasYM Raja Datoʼ Seri Abdul Aziz Raja SalimY.Bhg. Datuk Raymond LiewMr Chow Kee KanMr Damanhuri MahmodProf. Madya Dr. Noorhayati MansorMr Neoh Chin WahY.Bhg. Datoʼ Syed Amin AljefriExecutive SecretaryShahrizal MuhaiyarArticle ContributionMAREF invites members, contributorsand readers to contribute their own-writtenarticles in relation to corporate governance,business administration, economics,accounting, taxation and other topicsrelevant to the profession for publicationin MAREF Review. An honorarium wouldbe paid for any article selected forpublication in MAREF REVIEW.The MAREF Review is published by:Malaysian Accountancy Research &Education Foundation26A Jalan Padang BeliaBrickfields 50470 Kuala LumpurE-mail: admin@maref.org.myTel: 603 2274 9911,Fax 603 2273 7804Website: www.maref.org.myNote: The Foundation reserves the rightto edit or reject the articles submitted. Allrights reserved; no part of thispublication may be transmitted in anyform or by any means, electronic,mechanical, photocopying, recording orotherwise, with out prior permission of theFoundation.Concept & DesignDigibook Sdn BhdReign Associates Sdn BhdPrinterThumbprints Utd Sdn BhdInsightsThe Malaysian Accountancy Research andEducation Foundation (MAREF) was establishedin 1990 with the mission of being the foremostresearch and education foundation for theaccountancy profession in the country. Morespecifically, our focus is to promote research intothe education of accountancy, finance andmanagement together with all subjects in any wayrelated.In deriving to this objective, MAREF would amongothers provide grant funding for high qualityacademic research within its specified areas,which is timely, relevant, and useful to theaccountancy profession and for public interest. Itis hopeful that the grant funding would be able toassist our academic researchers, easing theirfinancial burden so they are able to completelyfocus on their research studies and producequality work.One of the most challenging aspects faced by thefoundation is to carry the task of conveyingresearch findings produced from academic researchto the perennial practitioner. It is imperative thatthe world of academia shares the producedresearch and knowledge with the practicingaccountants for the good of the profession.As a show of commitment, MAREF has decidedto embark into the publication of MAREF Review,a platform to showcase current research articleswritten by members of the academia as well aspractitioners to share their research experienceand information. The first of its kind in Malaysia,we hope the publication will be able to be the newpodium that brings the academia and practitionerscloser to generating knowledge together.Careful consideration has to be given to therelevance of research topics in relation to what ishappening in the real business domain. Realitychecks have to done to ensure the depth andquality of these papers. In todayʼs global businessenvironment, there is no room for mediocrity.Research must be of exacting standards that willbe able to withstand intense scrutiny.The foundation is determined to be at theforefront, identifying and developing knowledgefor the advancement of the profession. MAREF iscommitted to conveying the relevant messageacross to the profession through the relevance ofthe undertaken project and research.The MAREF Review highlights current researchpractices in the accounting field.The Trustees wishes to record their appreciationto those who have generously donated andsupport the activities of the Foundation. MAREF isan approved tax exempt non profit foundation asdefined under Section 44(6) of the Income Tax Act1967. All donations made toward MAREF areexempted from Income Tax.


FeatureINTRODUCTIONHow often have you come across yourcolleagues complaining about “stress at work”?It would come as no surprise that most of ushear complaints from our colleagues literallyeveryday about how stressful their jobs are.Stress appears to have become embedded inour daily lives, and especially in the workplace. According to French et al. (1982), stressat work occurs when the demands of a jobposes a high level of threat to the workenvironment, which in turn leads to stressrelateddisorders of a psychological andphysical nature. Stress at work can also causea decline in productivity and commitment onthe part of employees. (Montgomery et al.,1996).Even though not all types of stress are bad,stress at work can have a negative impact onboth employees and organisations. Arnold etal. (2005) points out that an employee maysuffer from physical and behaviouralsymptoms as a result of stress. Physicalsymptoms include a lack of appetite, cravingfor food, frequent indigestion or heartburn,constipation or diarrhoea, insomnia,headaches and nausea. Behaviouralsymptoms include a feeling of inability to cope,a lack of interest in life, constant or recurrentfear of disease, fear of failure, and a feeling ofbeing bad or of self-hatred. The even moresevere symptoms of stress would includecritical ailments and afflictions such ashypertension, heart attack, migraine,depression, skin disorders and tuberculosis.Besides, stress can be costly to organisationsdue to high labour turnover, lost value inproduction, increased recruitment andselection costs and high medical expenses.Auditors are often subject to high levels ofstress in the performance of their duties. Assuch, the high turnover rate of auditors hasalways been an unresolved problem facing theauditing profession in many countries for manyyears now. It was found that 15-20% ofauditors from the Big 4 audit firms, i.e.PricewaterhouseCoopers, Ernst & Young,KPMG and Deloitte Touche Tohmatsu leaveeach year (Economist, 2007) while theturnover rate was 15% for the smaller auditfirms (Stuart, 2006). A study conducted byPricewaterhouseCoopers found that theturnover rate was highest amongst entry-levelauditors, with one in four quitting his or her jobannually (Gullaapalli, 2005).The difficulty in retaining auditors by audit firmsconstitutes a major problem facing the auditingprofession in Malaysia. The Hewitt GlobalReport (2008) indicated that Malaysia is facinga shortage of qualified and managerial talent.Such a problem may pose a real and seriousthreat to the growth and expansionary plansand ambitions of many local and multinationalcompanies. Although there is no statisticalevidence published on auditor turnover inMalaysia, the problem of high turnoveramongst auditors in Malaysia was highlightedin Lee and Azhamʼs study (2009). The authorsfound that global competition for human capitalis one of the problems faced by the auditingprofession in Malaysia.The focus of this article is to identify the majorfactors contributing to stress at work within theauditing profession. This research is importantto the auditing profession and seeks to focuson appropriate remedial actions to reducestress levels within the auditing profession andconsequently the high turnover rate amongstauditors.FACTORS CONTRIBUTING TOHIGH LEVELS OF STRESSAMONGST AUDITORSAccording to researchers, there are fourplausible causes of work-related stress. Theyare role conflict, role ambiguity, work overloadand time pressure. In simple terms, role conflictMAREF REVIEW • 1


Featurerefers to a situation, where a person isconfronted with incompatible roles andexpectations at the same time. Role ambiguityis a result of problems associated with a lack ofclarity on the perceived and expected dutiesand responsibilities of a job position orfunction. Employees may be confronted with asense of work overload, when they are subjectto an inordinate amount of work to be done andoverwhelmed by it. Finally, time pressure isexperienced when there is simply insufficienttime and resources at hand to completeexpected tasks by certain datelines.Role ConflictAuditors often experience role conflictarising from the “complicated” nature ofauditing and itʼs specific role or functionin society. Auditors are commonlyregarded as public watchdogs by societyat large. They are expected to safeguardthe interests of not only their clients butalso the interests of audit beneficiaries.Audit beneficiaries include parties with aninterest as stakeholders such asinvestors, banks, creditors, and also thegovernment and the public at large.Auditors often face problems of roleconflict due to differing and incompatibleexpectations between their clients andaudit beneficiaries. For example, auditorsare likely to be advised by their clients tobe extra cautious when reporting theiraudit findings so as to avoid putting themunder the spot light unnecessarily.Clients may also expect auditors toengage in a minimum audit procedure inorder to keep costs low. Audit beneficiaries, onthe other hand, have different expectations tothat of clients and may well expect auditors toreport each and every finding without secondthoughts and to unearth instances of possiblefraud and wrongdoing.Auditors often face a conflict of interest inbalancing their roles as public watchdogs andat the very same time having to protect theinterest of their clients. On the one hand,auditors are required to fulfil their role asguardians of the public interest, whilst on theother hand, they are obliged to pander to thevery clients who pay their fees. Hence,auditors are often required to walk a very tightrope and strike a delicate balance between thedemands of their business and at the sametime, maintaining a high degree of professionalintegrity. The difficulty of having to play twodiffering and seemingly incompatible roles mayand very often exacts a heavy toll on auditors.Striking the right balance is often difficult andhaving to meet differing and incompatibleexpectations can lead to stress and very oftendoes.Role AmbiguityRole ambiguity arises from the lack of clearleads and understanding on the specific role orjob function an employee is required to play inan organisation. Employees are often cluelessas to the goals set for them or the expectationsand demands of management, resulting inthem lacking direction in the discharge of theirduties and the inability to perform their taskseffectively and efficiently. Anxiety and stressoften becomes attendant, where there is rollambiguity on the part of employees. Variousstudies have shown conclusively that roleambiguity is one of many factors that can andvery often causes stress amongst auditors(Larson, 2004). Role ambiguity amongst juniorauditors often arises where they are subject tostrict audit schedules and datelines butunaware or uncertain as to how to undertaketheir tasks in a professional manner to meetschedules and datelines.Work OverloadExtensive research undertaken has found adefinite correlation between work overload andperceived work-related stress. Auditors appearto be subject to a high level of stress whengiven near impossible datelines to meet andwhen required to complete an inordinateamount of work within a period of time deemedfar too short for completion of the tasks at handin a professional and satisfactory manner. Thisis especially true in the case of fresh graduateswho are unaccustomed to the dictates of thelife of a professional, join audit firms rightbefore or during “peak periods” when they aresubject to heavy workloads and lumbered withnumerous audit assignments requiring them towork around the clock. This intense workloadduring the peak audit time of the year has beenfound to be a major contributing factor to highstress levels and the consequent high turnoverrates amongst junior auditors.Time PressureAs far as auditors are concerned, the pressureof time or rather the lack of time to completeassignments within strict datelines, manifestsitself in two ways, i.e., time budgetpressure and time datelines pressure.Audit time budget pressure arises whenauditors are given rather strict and shorttime frames to complete certain specifiedaudit procedures. On the other hand,time deadlines pressure arises whennear impossible datelines are set for thecompletion of specified audit tasks(Margheim et al., 2005).Auditors often face problems relating tothe lack of adequate manpower; poorcommunication and coordinationamongst audit team members; and moreoften than not, unreasonableexpectations on the part of clients for thecompletion of various tasks within verytight datelines. A study by the author ofthis article has found time pressure to bea major contributing factor for the highstress levels amongst auditors,particularly amongst the more juniorauditors, who unlike their more seniorcounterparts, often lack the experienceto negotiate heavy workloads within tight andnear impossible datelines. This time pressureoften leads to high stress levels severelyaffecting their work performance and causingthe high turnover rates seen in many auditingfirms, whether large or small. The situation onlygets worse, where firms do not have in placestrategies and solutions to deal effectively withthe problem of high stress levels amongst theauditors in their employment.Auditors often facea conflict of interestin balancing theirroles as publicwatchdogs and atthe very same timehaving to protectthe interest of theirclients.2 • MAREF REVIEW


FeatureCONCLUDING REMARKSStress clearly affects the well being ofemployees. It also causes a high labourturnover, high absenteeism and might evenseverely affect performance of employees,and consequently the profit margins of thefirms who employ them. The high turnoverrate of auditors has become rather critical asfar as the auditing profession in Malaysia isconcerned and should be given dueattention, especially so since it is tied up withthe “brain drain” and the emigration ofeminently qualified professionals, who areleaving the country in droves to seek greenerpastures elsewhere.According to Elkin and Rosch (1990)(as citedin Cooper & Cartwright, 1997), there arevarious remedial strategies that can beadopted to reduce stress levels at work.These strategies include:• Redesigning the job function• Establishing flexible work schedules• Encouraging participative management• Providing social support and feedback• Building cohesive teams• Establishing fair employment policies• Providing recognition and extrinsic awardsIn addition, auditors should be given adequatetraining and endeavour to acquire managerialand interpersonal skills such as good timemanagement, effective communication skillsvis-à-vis clients and good negotiation skills inorder to work effectively and efficiently withinthe constraints of time pressure.It is our belief and conviction that withconcerted effort on the part of those in theauditing profession and with proper remedialstrategies in place to deal effectively with theproblems associated with high stress levelsamongst practising auditors, there should andwill be a light at the end of the tunnel for thoseafflicted with the problem of work-related stressand all its attendant ailments and afflictions.Hence,auditors are oftenrequired to walk a verytight rope and strike adelicate balancebetween the demandsof their business andat the same time,maintaining a highdegree of professionalintegrityReferencesArnold, J., Silverster, J., Patterson, F., Robertson, I.,Cooper, C., & Burnes, B. (2005). Work Psychology,Prentice Hall, fourth edition.Cooper, C. L., & Cartwright, S. (1997). AnIntervention Strategy for Workplace Stress. Journalof Psychosomatic Research, 43(1), 7-16.Economist (2007). Accounting for Good People.http://www.cfo.com/article.cfm/9531108/c_9826993French, J. R. P., Caplan, R. D., & Harrison, R. V.(1982). The mechanisms of job stress and strain.Chichester, England: WileyGullapalli, D. 2005. Take this job and …file it;burdened by extra work created by the Sarbanes-Oxley Act, CPAs leave the Big Four for better life.The Wall Street Journal, New York, May, C1.http://www.dzhphillips.com/inc/wsj-article.pdfHewitt Global Report (2008).http://www.hewittassociates.com/Lib/assets/AP/en-AP/pdfs/global_report_malaysia.pdfLarson, L. L. (2004). Internal auditors and jobstress. Managerial Auditing Journal, 19(9), 1119-1130.Lee, T. H., & Azham, M. A. (2009). Audit challengesin Malaysia Today, Accountants Today, October.Margheim, L., Kelley, T., & Pattison, D. (2005). AnEmpirical Analysis of The Effects Of Auditor TimeBudget Pressure And Time Deadline Pressure. TheJournal of Applied Business Research, 21 (1), 23-36.Montgomery, D. C., Blodgett, J. G., & Barnes, J. H.(1996). A model of financial securities salespersonsʼjob stress, The Journal of Services Marketing, 10(3), 21-38.Stuart, A. (2006). The People Who Count, CFOMagazine.http://www.cfo.com/printable/article.cfm/5674536/c_5676923?f=optionsAbout the AuthorsDr Teck-Heang Lee is a lecturer at the Monash University Sunway Campus(lee.teck.heang@buseco.monash.edu.my)Dr Yet-Mee Lim is an Associate Professor at the Universiti Tunku Abdul Rahman (UTAR)(limym@utar.edu.my)Dr. Ching-Seng Yap is an Assistant Professor at the Universiti Tunku Abdul Razak(yapchingseng@yahoo.com)Dr. Cai-Lian Tam is a Lecturer at the Monash University Sunway Campustam.cai.lian@med.monash.edu.myPlease give feedback and comments to admin@maref.org or directly to the authorMAREF REVIEW • 3


FeatureFigure 2Sources of career choice influenceNote: Based on Likert scale of 1 to 5, where 1= No influence; 2 = Unlikely influence;3 = Indifferent; 4 = Somewhat influence; 5 =Strong influenceStudentsʼ perception towards job as aChartered AccountantWe asked the students what they think about ajob as a CA. Eighteen factors that have beenidentified by Sugahara and Boland (2005) werereplicated and asked. Students were requiredto rate their agreements based on the Likertscaleof 1 to 5, where ʻ1” represents ʻstronglydisagreeʼ and ʻ5ʼ indicates ʻstrongly agreeʼ.Eight out of 18 attributes were rated above4 points – suggesting studentsʼ strongagreement. Among these attributes, studentsseem to view accountants as having high socialprestige and making a positive contribution tosociety. Students also view a career as anaccountant as intellectually challenging.Figure 3Perception towards job as a CAWhile students tend to think the job wouldrequire them to work overtime, they also agreethat it offers them a good salary, be it atentry level or over the long-term. Inaddition, they also believe that workingas an accountant will provide themwith good career advancementopportunity. Even though within thisperiod of economic uncertainty,students agree that job availability isnot a problem.As for the restof the othera t t r i b u t e s ,despite havebeen ratedbelow 4 points, themean scores indicatethat the respondentsare leaning moretowards ʻagreeʼ thanʻindifferentʼ. Thelowest score (mean =3.66) is on thestatement that theaccounting professionis dominated largely by men.Factors that deter students frombecoming a Chartered AccountantIt is interesting to note that students wereasked to rate certain attributes that mightdiscourage them from joining the profession.Many students rated ʻtoo much time to gain CAqualificationsʼ the most. Possibly, moststudents are of the opinion that the three yearsexperience requirements are discouraging. Itwas not unexpected that students also agreethat ʻchallenge to the workʼ, ʻtoo many hurdlesʼand ʻno time to relax in the first few yearsʼ areamong the factorsthat distance themfrom becoming anaccountant. It isinteresting to notethat students tend tothink that it isimportant to mastermathematics inorder to become aCA, although thescore is just slightlybelow ʻ4ʼ (i.e. agree).This indicates thatsome accountingstudents are stillNote: Based on Likertscale of 1 to 5, where1 = Strongly disagree;2 = Disagree;3 = Indifferent;4 = Agree;5 = Strongly agreevague as to what skills are needed to be anaccountant. Students also tend to agree (3< mean score < 4) that a job as an accountanthas a dull image but would cost a lot of moneyto become one. Recent businessdevelopments might also cause students tothink of the view of a lawsuit against anaccountant as a deterrent.Figure 4Factors that deter students from being aChartered AccountantConclusionThis paper has examined studentsʼ perceptionof a career as a Chartered Accountant. Wefind that the majority of respondents make theircareer choice decision during high school. Ourstudies reveal that parents are the main sourceof influence on their career choice decision.Studentsʼ perception towards a job as a CA isthat it provides good advancementopportunities and has a high social prestige.However, too much time to gain the CAqualification and challenges in the work in thefirst few years, are among factors thatdiscourage them from joining the profession.Selected ReferencesAbdullah, M. (2001). Akauntan profesional: PelajarMelayu bertanggapan lapuk, Pendidikan, UtusanMalaysia, 25 June, p.6.Hermanson, D.R., Hermanson, R.H. & Ivancevich,S.H. (1995), Are Americaʼs top business studentssteering clear of Accounting? Ohio CPA Journal,54(2):26-30.Paolillo, J.G.P. & Estes, R.W. (1982), An empiricalanalysis of career choice factors among accountants,attorneys, engineers, and physicians. AccountingReview, 57(4):785- 793Sugahara, S. & Boland, G. (2005), Perceptions of thecertified public accountants by accounting and nonaccountingtertiary students in Japan, Asian Reviewof Accounting, 14(1/2), 149-167.About the AuthorsShamharir Abidin and Nurwati Ashikkin hold aPhD degree in Accounting, and Accounting &Finance, respectively, from the University ofStirling, UK. Nadji Salmi holds a MSc degreein International Accounting.Please give feedback and comments toadmin@maref.org or directly to the authorMAREF REVIEW • 5


FeatureCorporate Social Responsibility:Business Strategy TowardsValue CreationBy Roshayani Arshad*, Noraida Saidi, Siti Noor Azmawaty Abdul Razak and Zafiruddin BaharumIntroductionThere is a growing realisation amongcorporations that corporate social responsibility(CSR) activities can be a proactive businessstrategy and an effective tool in creating andsustaining corporate success. Manycompanies have responded to such realisationby devoting more corporate resources to CSRactivities. However, in a competitive businessenvironment, it is important for companies toidentify the resources that will potentiallycontribute to corporate success.Using the annual reports of 242 Malaysianpublic listed companies, this study investigatesthe effects of corporate resources in promotingCSR disclosure. In addition, this study alsoexamines the relationships between CSRdisclosure and firm performance in 2006, 2007and 2008. Results of this study revealedsignificant relationships between intangibleand tangible assets on the extent of CSRdisclosure. The stronger effect of tangibleassets relative to intangible assets infers thattangible assets have the propensity to impactsignificantly on a companyʼs success.Companies with such assets can increase thevalue-in-use of the assets and at the sametime creating barriers to duplication inmanaging their assets for competitiveadvantage. This is corroborated by thesignificant relationships between CSRdisclosure and firm performance. In summary,findings in this study indicate that corporateresources are an important tool for managersin developing CSR activities as a businessstrategy to create and sustain a competitiveadvantage. This in turn has the propensity toimpact significantly on a companyʼs success.CSR Reporting in MalaysiaCorporations have been encouraged orrequired by regulators to move towards sociallyresponsible behaviour in their businessconduct. Many countries, including Malaysiabegan incorporating mandatory CSR reportingfor public listed companies. Public-listedcompanies are required to disclose their CSRactivities in the annual reports effective fromfinancial year-end 31 December 2007.However, the extent and nature of CSRdisclosures remain voluntary. Managersʼdiscretionary disclosure incentives are guidedby CSR framework introduced by BursaMalaysia in 2007. Bursa Malaysia defines CSRas “open and transparent business practicesthat are based on ethical values and respectfor the community, employees,the environment, shareholdersand other stakeholders. It isdesigned to deliver sustainablevalue to society at large”. In linewith this, the four dimensions ofBursa Malaysia CSR frameworkare Communities, Environment,Workplace and Marketplace.Prior to the above regulatoryefforts, the government haslaunched the ʻSilver Bookʼ on 25September 2006. In essence,the ʻSilver Bookʼ has three key objectives: toclarify expectations of Government-linkedcompanies (GLCs) contributions to society, toguide the GLCs in evaluating their startingposition in contributing to society, and toprovide GLCs with a comprehensive set oftools, methodologies and processes toproactively contribute to society in aresponsible manner, while creating value fortheir shareholders. Contribution to societyencompasses seven core areas: human rights,employee welfare, customer service, supplierpartnership, environmental protection,community involvement and ethical businessbehaviour. Besides the introduction of theʻSilver Bookʼ, other regulatory initiatives suchas tax deductions for companies who providepublic facilities and ʻgreen themeʼ (such asbiomass energy, biodiesel and biogas plants,sale of certified emission reduction or carboncredit etc) have also been introduced. Theoverall regulatory efforts are expected toincrease managersʼ awareness to makedetailed disclosure of CSR activities in theircompaniesʼ annual reports. Concurrently, it isalso expected to increase stakeholdersʼexpectations towards expecting more CSRdisclosures.Figure 1 presents the trend of CSR disclosuresfrom 2006 to 2008, based on the sample ofcompanies used in this study. The three-yearwindow represents the extent of CSRdisclosures in the period before theimplementation of mandatory disclosurerequirement in 2006, during the period ofimplementation in 2007 and after theimplementation of mandatory disclosurerequirement in 2008.Figure 1:CSR Disclosures for 2006, 2007 and 2008The extent of CSR disclosures in companiesʼannual reports in 2008 and 2007 has improvedsubstantially as compared to those of 2006. In2006, 56.6 percent of the sample companiesmade zero disclosures. In contrast, only 11.6%and 3.3% companies did not disclose theirCSR information in 2007 and 2008respectively. This infers that companies abideby the new regulation of disclosing someinformation relating to their CSR activities intheir annual reports. The improvement in CSRdisclosure is further corroborated by theevidence revealed in Table 1 below. Results inTable 1 indicate that the mean for CSRdisclosure in 2006, 2007 and 2008 were 256,597 and 818 respectively. In addition, themaximum score for CSR disclosure hasincrease from 4,803 in 2006 to 9,942 in 2008.6 • MAREF REVIEW


FeatureTable1: Descriptive Statistics for CSR Disclosures for 2006, 2007 and 2008.Minimum Maximum Mean2006 2007 2008 2006 2007 2008 2006 2007 2008CSR 0.00 0.00 0.00 4,803.00 4,313.00 9,942.00 256.29 596.66 818.13Corporate Resources and CSRDisclosureCorporate resources can generally becategorised on the basis of barriers toduplication and a broad distinction is madebetween assets and capabilities. This studyfocuses on assets as the corporate resourcesowned and controlled by the company that areexpected to generate and sustain competitiveadvantage of a company. Corporate assetsrefer to tangible and intangible assets. Tangibleassets are assets that have physical existenceand can include property, plant, equipment andinventories. In contrast, intangible assets donot have physical existence and these assetsinclude intellectual property, brand andreputation. Table 2 presents the level ofcorporate resources controlled and owned bythe companies in the sample of study.Table 2: Descriptive Statistics for Intangible and Tangible AssetsMinimum Maximum Mean2006 2007 2008 2006 2007 2008 2006 2007 2008INTAN (mil) -5.29 0.00 0.00 7,059.10 8,958.81 8,394.67 111.70 145.19 155.87TAN (mil) 0.00 66.00 64.91 102,108.02 67,725.00 69,841.90 2,202.17 2,175.60 2,308.12Legend: INTAN represents Intangible assets and TAN represents Tangible assets.The level of intangible assets ranges fromRM5.29 (negative) million to RM7,059 millionin 2006, zero to RM 8,958 million in 2007 andzero to RM8,394 million in 2008. In contrast,Table 2 reveals that the level of tangible assetsranges from zero to RM102,108 million in2006, RM66 million to RM67,725 million in2007 and RM65 million to RM69,841 million in2008. These results indicate that the level oftangible assets is significantly higher than thelevel of intangible assets.Using the resource based view theoryperspective, this study argues that corporateresources are important drivers on thecompanyʼs success. Corporate resources areimportant in developing and maintainingcompetitive advantage of a company. In linewith this, it is expected that companies devotemore resources to CSR activities as abusiness strategy to create and sustain acompetitive advantage. Hence, this studyfocuses on the relationship between corporateresources and CSR disclosure. However,corporate resources have different elementsand these in turn will have different effect onthe comparative advantage of the company.For instance, intangible assets such aspatents, copyrights and brands are generallyprotected legally and this reduces the potentialof duplicity by competitors and reaping thebenefits from such agreements. Intangibleassets such as corporate reputation andintellectual capital are even more difficult toduplicate as these assets are developed overa certain period of time and characterised byhigh level of specificity and complexity. Thisstudy broadened the scope of corporateresources by including the effect of tangibleassets in explaining the sources of competitiveadvantage and consequently on CSRpractices and disclosure. Table 3 presentsmultiple regression results for corporateresources and the extent of CSR disclosuresfor 2006, 2007 and 2008.Table 3: Multiple Regression Results for Corporate Resources and the Extent of CSRDisclosures for 2006, 2007 and 20082006 2007 2008Constant 0.124 0.710 0.906Adjusted R2 0.348 0.328 0.277LEV 0.025** 0.042** 0.012**ROA 0.000*** 0.000*** 0.069*INTAN 0.338 0.050** 0.044**TAN 0.001*** 0.041** 0.000***Legend:INTAN represents Intangible assets, TAN represents Tangible assets, LEV represents leverage and ROArepresents Return on Assets. LEV and ROA are control variables.Coefficient for each variable is shown with t – statistics in parentheses* Significant at 10% level (1-tailed test); * * Significant at 5% level (1-tailed test);* * * Significant at 1% level (1-tailed test)The results in Table 3 indicate insignificantrelationship between intangible assets andCSR disclosure in 2006. Except for this,corporate resources are positively significantlyrelated to CSR disclosure. The significantrelationships for intangible assets in 2007 and2008 indicate increase awareness amongcorporate citizens that intangible resources areimportant source of creating and sustainingcompetitive advantage. It also highlights thatdespite the relatively low level of intangibleassets, companies are allocating some ofthese resources to engage in corporate socialactivities. In relation to tangible assets, thisMAREF REVIEW • 7


Featurestudy provide new evidence that companies inMalaysia do not exclude tangible assets aspart of management strategic tool towardsdeveloping and maintaining competitiveadvantage.CSR Disclosure and FirmPerformanceIn satisfying the needs of variousstakeholders, companies can no longer focustheir business objectives primarily onmaximising profits. These stakeholdersinclude among others, employees,shareholders, customers, suppliers,communities, and the natural environment. Inthe advent of globalisation, rising consumerexpectations towards business conduct andemergence of regulatory efforts promotingCSR practices, it is paramount that companiesgo beyond market transactions gain in orderto meet the various needs and gain support ofstakeholders. Serving the implicit claims ofvarious stakeholders are expected to enhancea firmʼs reputation that will consequently leadsto a positive impact on firmʼs financialperformance. While companies in developedcountries have incorporated CSR practicesinto their business strategies, companies indeveloping countries often lag behind theirdeveloped countriesʼ counterparts (KPMG,2005).In Malaysia, the introduction of mandatorydisclosure requirements of CSR practices incompaniesʼ annual reports in 2007 providesan important mechanism for companies tocommunicate their CSR practices to variousstakeholders. Through such disclosures,stakeholders would be able to assess whethercompanies are meeting their needs.Concurrently, it allows companies to establisha relationship with various stakeholders andconsequently gain support from thesestakeholders. This in turn is expected to havea positive impact on firmʼs financialperformance. Alternatively, failure to do socould lead to potential withdrawals of supportfrom the stakeholders and consequentadverse effects on firmʼs performance.The relationship between CSR disclosure andstock returns as a measure of firmperformance is shown in Table 4.The results in Table 4 reveal a positiverelationship between CSR disclosure andfirm stock returns for the three years. Thisinfers that managers foresee significant valueadditions in firm performance due tostrengthened stakeholdersʼ relations throughCSR initiatives and disclosures. This in turnmotivates companies to engage in CSRactivities, which are then communicated tothe various stakeholders through disclosurein companiesʼ annual reports. Consequently,the support from the stakeholders is reflectedin the valuation of the company by theinvestors.Summary and ConclusionThere is an increasing awareness of theimportance of CSR activities and disclosuresamong public listed companies in Malaysia. Inline with this, companies allocate theircorporate resources in developing CSRactivities as a business strategy to create andsustain a competitive advantage. Theavailability of tangible and intangible assetsfacilitates companies to develop their CSRactivities as a tool to gain sustainablecompetitive advantage. Companies with suchassets can increase the value-in-use of theassets and at the same time create barriers toduplication in managing their assets forcompetitive advantage.The significant relationships between CSRdisclosure and stock returns indicate thatcompanies are shifting their focus beyondmarket transaction gains. Instead, companiesare recognising the strategic importance ofCSR practices in their efforts to satisfy thevarious needs of stakeholders. CSR disclosureprovides a vehicle for companies tocommunicate and gain support from thestakeholders. The significant effect of CSRdisclosure on firm performance highlights theimportance of CSR practices and disclosuresas a proactive business strategy and aneffective tool in creating and sustainingcorporate success. In addition, the regulatoryeffort in Malaysia has the propensity to be aneffective mechanism in influencing managersto engage in CSR activities and disclose morecomprehensive CSR information.About the AuthorsRoshayani Arshad, Noraida Saidi,Siti Noor Azmawaty Abdul Razakand Zafiruddin Baharum,Accounting Research Institute,Faculty of Accountancy,Universiti Teknologi MARA,Shah Alam, MalaysiaCorresponding author:roshayani@salam.uitm.edu.myPlease give feedback andcomments to admin@maref.orgor directly to the authorTable 4: Multiple Regression Results on the Relationship between the Extent of CSRDisclosures and Stock Returns for 2006, 2007 and 20082006 2007 2008Constant 0.663 0.603 0.728Adjusted R2 0.413 0.345 0.366ROS 0.000 *** 0.000*** 0.000***LEV 0.004 ** 0.000*** 0.000***SIZE 0.000 *** 0.001*** 0.004**Legend:ROS represents stock returns, LEV represents leverage and SIZE represents size. LEV and SIZE are controlvariables.Coefficient for each variable is shown with t – statistics in parentheses* Significant at 10% level (1-tailed test); * * Significant at 5% level (1-tailed test);* * * Significant at 1% level (1-tailed test)Corporations havebeen encouraged orrequired by regulatorsto move towardssocially responsiblebehaviour in theirbusiness conduct.8 • MAREF REVIEW


FeatureEnvironmental Tax Laws in Malaysia TodayBy Loo Choo HongMany countries in the world have beenvery seriously looking at environmentaldegradation since the 1980s. Oneissue relates to the thinning of the ozone layer.Since then, various issues concerning theenvironment such as global warming, thedisappearance of many animal and plantspecies has come into picture. Variousmeasures and tools have been developed bygovernments and the public to elevate theissues related to environmental degradation.Some measures are voluntary- like not eatingshark-fins and others, were exercised usingthe power of the law such as tolls whenentering city limits. Taxation is a tool that thegovernment uses to collect revenue and toprevent and encourage certain behaviour. Astaxation is monetary in nature, it is a good wayto encourage or discourage a countryʼs citizento behave in a certain way as deemedappropriate by the government.Malaysian Law and theEnvironmentLike any other country on the planet, Malaysiais not immune to environmental degradation.The authorities have come up with variouslaws to tackle the problem. The mainenvironmental law was introduced in 1974 withthe Environmental Quality Act 1974. In 1996,Malaysia hosted the Commonwealth Heads ofGovernmental Meeting. One of the majorsuccesses of the meeting was the LangkawiDeclaration, the first declaration from the BritishCommonwealth concerning the environment. Asa signatory of the UN Framework Conventionon Climate Change, Malaysia ratified the KyotoProtocol in September 2002. In 2009,Malaysia introduced a comprehensive policyon the environment called the National GreenTechnology Policy. The New Economic Modelintroduced in 2010 envisions Malaysia as aleader in green technology through thecommercialisation of the countryʼs biodiversityinto high-value products and services and tocut by 2020 the countryʼs green houseemissions to 40% of 2005 levels.Malaysian Environmental Tax LawTaxation in Malaysia encompasses directtaxation, indirect taxation and localgovernment taxation. Malaysian law, includingtax law, due to historical connections to BritishColonial History, is based on the BritishCommon Law system. The Malaysian Taxsystem, a subset of the Malaysian legalsystem, acknowledges cases from UKdominions such as Australia, Hong Kong andIndia. The Income Tax Act 1965 is based onBritish, Australian and Indian models.Since independence, case laws from theCommonwealth may have influenced thelawmakers in Malaysia; however MalaysianLaws are derived from Parliament and from thedecisions of the local courts. Britain began toadopt large chunks of environmental tax lawsdue to European Union membership. Due tothe need to move its economy from anagricultural base to a manufacturing base, inthe post independence years, Malaysiantaxation laws had moved in tandem with thatneed. Various tax incentives such asReinvestment Allowances, Accelerated CapitalAllowances, Investment Tax Allowances andPioneer Status concentrated on themanufacturing sector.Environmentalism in Malaysia came into thepicture to a certain degree in the earlier 1970sbut mostly in the 1990s due to the pressuresof environmental degradation- especially theozone layer. As a mode to carry out governmentpolicy, taxation laws were amended to suit theevolving policies of the day. To answer theneed for the country to go “green”, thegovernment has introduced various tax and taxincentive to address the needs of the varioussectors of the economy.The Energy SectorThe promotion of environmental measures anduse of renewable energy especially in the formof biomass in the private sector throughincentives was first introduced 8th MalaysiaPlan/Five Fuel Policy, which covered theperiod 2001-2005. The incentives in budget2004 are• Pioneer statusAn exemption of 70% (100% for valueadded products and promoted areas) ofincreased statutory income for 5 years forany manufacturing company, whichreinvests in machinery utilising oil palmbiomass (in the 2004 Budget).• Investment Tax Allowance (ITA)Tax exemption up to 70% of statutoryincome for each year of assessment fromITA computed at 60% of additionalqualifying capital expenditure incurredwithin 5 years for any manufacturingcompany, which reinvests in the machineryby utilising oil palm biomassFor the energy related measures, companiescan also qualify for higher exemptions orallowances if the activities take place inʻpromoted areasʼ. Originally the four-fueldiversification policy focused on oil, gas, coaland hydro. In the 8th plan, it was broadened toinclude renewables as a fifth item in the newFive Fuel Strategy.In 2003 - 2006 the Phase I Biogen Projectcame into effect in the form of Grid-ConnectedPower Generation and Co-Generation(Biogen) Project. The project aims to reducethe growth rate of greenhouse gas emissionsfrom fossil fuel by promoting biomass-basedpower generation and combined heat & powergeneration system using wastes from palm oilmills. Phase II of Biogen Project wasimplemented between 2007 and 2009.The Malaysian government could go further inencouraging renewable energy. Variousmeasures were taken by the U.K. governmentto encourage the usage of biofuel. In 2003, theprice of biofuels was set at a price 20p lowerthan low sulphur fuel. In Australia, a taxincentive is given to vehicle owners who usebiomass and Liquefied Natural Gas (LNG)/Liquefied Petroleum Gas (LPG) vehicles. AsMalaysia is a major producer of palm oil (andbiomass fuels) and LNG/LPG, incentives toencourage the production of biomass andLNG/LPG vehicles and machines should beintroduced.Green BuildingsThe Malaysia Building Integrated PhotovoltaicTechnology Application (MBIPV) (2005-2010)project was introduced to promote increaseduse of photovoltaic (PV) technology to tapsolar energy and generate electricity forbuildings. The project is expected to increaseMalaysiaʼs installed BIPV capacity by about330% (2MWp by 2010), and to lower thetechnology unit cost by some 20%.In Budget 2010, owners of buildings awardedthe Green Building Index certificates areentitled to a tax exemption of 100% of theadditional capital expenditure and exemptionfrom stamp duties for first owners. Hong Kongis the other territory, which has similarincentives. Developers should take advantageof this incentive to come up with products tosuit the “green” property buyer.MAREF REVIEW • 9


FeatureTransportation SectorIn the Budget of 2009 franchise holder ofhybrid cars are given 100% import duty and50% excise duty exemptions on newCompletely Built Unit (CBU) hybrid cars. InBudget 2011, the government fully exemptedthe import and excise duties on hybrid andelectric cars and motorcycles.The duty exemption of the import of hybrid carsis a first step towards getting Malaysian toown hybrid vehicles. However the governmentshould encourage Malaysia vehiclemanufactures to produce hybrid or electricvehicles through tax incentives such pioneerstatus or investment tax allowances.Public TransportGovernments around the world give variousincentives to encourage the usage of publictransport. In Australia, as a measure toencourage businesses to invest in publictransport, accelerated depreciation is given totaxpayers for the purchase of transportequipment. In Malaysia, instead of tax incentives,the government invests in government linkedtransport companies such as RapidPenangand RapidKL.In the Budget 2009, the Malaysiangovernment will provide a soft loan facility ofRM3 billion under the Public TransportationFund, to finance the acquisition of buses andrail companies.To encourage private transport providers tomodernise their fleet, the government shouldconsider giving the reinvestment allowancesto the providers so that they can buy newermore fuel-efficient fleets.Plastic BagsThe ban on the issuance of plastic bags beganat the state government level in Penang in2009 and Selangor in 2010. In Penangretailers are not allowed to provide plasticbags to their customers on Mondays, thenslowly up to Thursday. By 2011, the PenangState banned the issuance of plastic bag by allretailers. Customers who want plastic bags willbe charged 20sen per bag. The collections aredonated to the poor in Penang. In Selangorplastic bags are not provided on Saturdays. In2011, the Federal government discouragedthe issuance of plastic bags nationwide onSaturdays.The act of restricting the use of plastic bagsthrough taxation or other methods is nothingnew. The Republic of Ireland imposed a tax onplastic grocery bags in 2002, San Franciscobecame the first U.S. city to ban conventionalplastic bags and the City of Los Angelesfollowed suit in 2010.The concept of plastic bag taxation in Penangand Selangor works similarly to the concept ofBaitul mal, which is unique in Malaysiawhereby the monies collected are redistributedto the poor. The ban of plastic bags opens theopportunity for business people to come upwith recyclable bags (which can be pricier thanplastic bags) and paper shopping bags.Waste recyclingTo promote waste recycling in industryMalaysia introduced various incentives in theform of Pioneer status, Investment TaxAllowances, Accelerated Capital allowanceand Reinvestment Allowances.In the U.K., the government concentrates onrecycling even to the level of the householders.The Climate Change Bill enables localauthorities to pay rebates to householders forgood performance on recycling and wasteminimisation. It also allows an authority, if itchooses; to collect incentive based paymentsfrom householders for waste collection.Authorities will also be able to pay backrebates, and collect any payments, through theCouncil Tax system, should they wish to do so.It is commendable that Malaysia is starting toencourage its citizens beginning with thebusiness sector to recycle. However a morecomprehensive recycling policy, which includesthe household, should be introduced. Like therecycling rewards system, measures such asthe compulsory separation of garbage shouldbe introduced.Employment TaxationIn Malaysia, the provision of employeetransportation is a deductible expense undersection 33 of the Income Tax Act 1967. InAustralia, employee transport claims if theemployee uses public transport is a deductiblebusiness expenses.Certified emission reduction unitsMalaysia exempted the income from the saleof certified emission reduction units from taxfrom the year of assessment 2008 to 2012.However there are plans for the Malaysiangovernment to incorporate certified emissionreduction units with “Green Palm Oil”. However,according to the New Economic Model forMalaysia Part 1 report, this initiative can work ifa more comprehensive and binding global carbontrading and emissions regulation is set up.The Future is “Green”, but it canbe “Greener”Whether we like it or not, environmentaldegradation has become a serious probleminternationally. Countries have come up withvarious measures to tackle environmentaldegradation. One of the tools to discourageenvironmental degradation is the introductionof environmental tax. Developed countriessuch as the United Kingdom, Australia and theEuropean Union were one of the first tointroduce laws to address environmentaldegradation with Australia in the 1940s and theUnited Kingdom in the 1950s. Malaysia beganto introduce laws governing the environment inthe 1970s.However with the worsening environmentalsituation globally in the 1990s, countriesincluding Malaysia began to introduce tougherenvironmental laws – including environmentaltax laws. However the development ofenvironmental laws in the U.K., Australia, U.S.and even in Malaysia were based on a piecemeal approaches. Changes to the laws wereintroduced to address issues such as landfillwaste, traffic and ozone thinning as and whenthe laws were needed.China and the HKSAR however took a differentapproach when dealing with environmentaldegradation beginning in 1996 where thepolicy of “polluter pay” was introduced. This isthe first time whereby environmental taxpolicies in China were looked at as a group ofinter-related laws rather than piece mealissues as practiced in Australia, U.K. and U.S.In the Malaysia the same piece meal approachis used when introducing environmentalprotection policies in the country. As describedearlier, between 1974 and today, variouspieces of legislation (including environmentaltax laws) have been introduced to try toaddress the issue of the day.If a country like China can take a bold step byintroducing a more comprehensive set ofenvironmental laws in 1996, the sameapproach could also be adopted internationallyincluding in Malaysia. However there is a needto introduce a set of comprehensive tax law,which are acceptable and operational to thepublic. This would actually reduce the instancesof non-compliance or even mitigation.Whether it is going to be a lighter or darkershade of “green tax” laws, it is for us to see.Like it or not, to keep up with worlddevelopments, Malaysian tax laws have tobecome “greener”.About the AuthorsLoo Choo Hong is currently a facultymember at Wawasan Open University,Penang and a doctorial student atUniversity Tun Abdul Razak in KualaLumpur. The article was first presented at1st National Conference on NaturalResoruces in Kota Bahru and has beenrevised to reflect the changes since then.Please give feedback and comments toadmin@maref.org or directly to the author10 • MAREF REVIEW


InTouchTheChangingPhaseBy Rita BhanguThe world is experiencing a massivechange in the way communications arecarried out. Communicating throughsocial networking sites is the in-thing thesedays. This form of interaction in the cyber worldis a very recent development in the last decadeor two. Social media sites such as Facebook,MySpace, Twitter, and LinkedIn are amongstsome of the more popular sites used forcommunication purposes today.It used to be people talked over phones andwrote letters to keep in touch. People arebeginning to exchange these for electroniccommunication. Like all new technology it isbecoming the way of communicating. In theeuphoria many often overlook the dark side ofsocial media. Is social media good or bad? Theanswer is not a simple one as it is somewhatsubjective and it cannot be applied to everyoneand all situations.The one good thing about this form ofcommunication is the ease with which we areable to connect with one another across theglobe. It makes it simple to find people we havelost contact with or getting to know friends andrelatives better via this mode of communicationas meeting physically takes time and effort.What was traditionally done on a phonepreviously is now done online. And it is soaccessible that the cost of being online is verylow compared to making phone calls or usingthe snail mail.Social networking sites permit the exchangingof ideas with an ever-expanding community ofusers. Everyone can have an opportunity toshare thoughts, ideas, and comments, with awider audience. Social media makes it somuch easier to collaborate with others and findout what is going around them.The concept of social media is top of theagenda for many business executives today.Top management as well as consultants try toidentify ways in which companies can makeprofitable use of applications like Facebook,MySpace, Twitter and LinkedIn. Companieshave realised the potential of marketing viasocial media using it to build awareness andproviding support. These days, forwardthinking companies are also using the socialengines to inform of their strategic decisionsand execute their objectives, marketing plansand product information and more.Essentially, we cannotignore the presence ofsocial media because thisis where society is headedtoday. According toForrester research in theUnited States, 80% ofyoung adults use socialnetworks. Itʼs a popularmedium that is easilyaccessible to anyone andfosters communities andrelationships.However, the simplicity ofbeing found is in a way adisadvantage to the socialmedia phenomenon. Themany details put online ona social media site canmake one an easy target.These makes it easy tofind people in the realworld, thus increases the risk of exposure topossible physical assault in extreme cases.Social media allows one to hide behind acomputer. This kind of communication cancompound certain social defects that somepeople suffer such as social anxiety. It becomesan unhealthy mode of communication for suchpeople.There is also a risk of becoming addicted tosocial media. How often do you compulsivelycheck the social media site for updates on yourfriends or hope that others have responded tosomething that you have posted? And many doit at work, which becomes a matter of greatconcern for the employer. If itʼs too often thendo something to break the habit. Rather thanspending time on the social media sites, it ishealthier to go out and spend time with friendsor do other outdoor stuff to enrich the mind.Students have a tendency to get hooked onsocial media sites and often neglect theirstudies. Students also tend to put up all theirpersonal details on these sites and have noqualms about befriending strangers who couldvery well take advantage of them. Parents,teachers and guardians must take the initiativeto explain to students the dangers, safety andpitfalls of social media sites and on how tomake the most use of these sites in a positiveway.Many parents, who do not realise the negativeimplications of social media sites, musteducate themselves about these sites andcheck on their childrenʼs online activities.Studies have shown that people spend moretime on Facebook and Twitter than they doresearching on the web or reading books.Instead of arguing and preventing their childrenfrom indulging in social media sites, parentsshould realise that technology is here to stayand if used correctly, can be a valuableeducational tool. Telling teens not to go onFaceback or not to Tweet is an exercise infutility. And there are a lot more advantages tousing social media in education, if itʼs usedproperly and with caution.With more than 550 million people onFacebook, 65 million tweets posted on Twittereach day, social media has become an integralpart of our lives. Itʼs a new way ofcommunication that will define a generationand itʼs here to stay.MAREF REVIEW • 11


Foundation NewsMAREFActivitiesThroughout the financial year of 2010-2011, the Malaysian AccountancyResearch and Education Foundation(MAREF) received significant support frommembers of the Malaysian Institute ofAccountants (MIA) – who gave their time,talent, and financial support at exceptionallevels. Once again, we successfully organisedseveral important programs that are gearedtoward meeting the vision and objective of thefoundation.Among the important Programme Highlightsduring this financial year, include:• MAREF as co-organiser of an internationalEarly Career Research Consortium incollaboration with IAAER, ACCA andUniversity Malaya 8 November 2010.• MAREF as the organiser of the 1stMAREF MYAA National Seminar entitledNew Economic Model – MakingAccounting Education Relevant held on 5January 2011• MAREF as the co-organiser of a halfdaylecture seminar titled "AccountingStandards and Industry-AcademiaCollaboration" at Universiti Malaysia Sabahon 23 June 2010 presented by YBhg DrNordin Zain, Executive Director DeloitteMalaysia.• MAREF as the co-organiser with UniversityMalaya of a lecture titled ʻThe NewEconomic Model - Implication On TheHigher Education Sector by Datuk DrMahani Zainal Abidin Executive DirectorISIS Malaysia held on 14 October 2010.The Foundation also supported the followingconferences aimed at providing a platform thatbrings together researchers and practitionersin the accounting field to share experiencesand ideas in their respective areas of expertise.• Participation in the World Congress ofAccountants Kuala Lumpur, 8-11November 2010We created two major initiatives for thispurposes• Publishing another journal in collaborationwith Universiti Kebangsaan Malaysia. Thesigning ceremony was held in June.MAREF was represented by DatukRaymond Liew and En DamanhuriMahmood whilst UKM was represented byDean of Business School• MAREF has successfully selected thewinners of its 3rd Most OutstandingResearch Paper Award (MORPA 2009).The competition was supported by MOHE,CTIM, PNB and PERSAMA.MAREF is grateful for the many generouscontributions and support to the Foundation. Itgives the foundation the encouragement towork harder in the future in efforts to promotethe advancement of education, research andtraining in the accounting profession.Please visit our website at www.maref.org.myfor more information on our previous and futureactivities.7Captions:1 Signing Ceremony on the Publication of the Asian Journal of Accounting and Governancebetween MAREF and Universiti Kebangsaan Malaysia on 3 July 20102 Discussion between the Vice Chancellor of Universiti Malaya and representative from IAAERResearch Consortium Program held on 8 November 20103 Dean of Faculty of Business and Accountancy Universiti Malaya Associate Professor Fadzillah inher welcoming speech in the presence of YBhg Datuk Dr Mahani Zainal Abidin, Director GeneralInstitute of Strategic and International Studies (ISIS) Malaysia4 Exchange of momentos between Ybhg. Datuk Dr. Ghauth Bin Jasmon, Vice Chancellor ofUniversity Malaya and Professor Mary Barth of The International Association for AccountingEducation and Research (IAAER)5 Discussion between panel of experts from IAAER and early career candidates from Malaysia6 The opening ceremony of MAREF – IAAER Research Consortium 2010.7 Professor Dr Norman Mohd Saleh from Universiti Kebangsaan Malaysia receiving his certificateas one of the winners of the 3rd MORPA Competition from YBhg Associate Professor Dr ZaridaHambali, Director, Academic Development Unit, Ministry of Higher Education Malaysia.6453• International Conference onFinancial Criminology (ICFC) 2010on 14 & 15 December, 2010organised by UTIMIn achieving the vision of theFoundation, MAREF is to be thecountryʼs premier source of thoughtprovokingand credible researchthat advances the practice ofaccountancy.1212 • MAREF REVIEW


Foundation NewsWinners for the3 rd Malaysian Outstanding Research Paper Award 2009MAREF is pleased to announce thewinners for the 3rd Malaysian OutstandingResearch Paper in Accounting Award(MORPA) 2009. This year, the competition wassupported by the Ministry Of Higher Educationand the Malaysian Accounting Association(MYAA), co sponsored by Charted Tax Instituteof Malaysia (CTIM), Perbadanan NasionalBerhad (PNB) and Persatuan Akauntan SektorAwan Malaysia (PERSAMA).The competition held from 1 October 2009 until1 February 2010 had encouraging responsewith over 92 papers submitted to thecompetition secretariat. The competition wasopen to written research on accounting relatedthemes completed from 1 January 2007 to 31December 2009. All the papers were reviewedin a two-tier assessment process - eachassessment conducted by teams consistingexperts from academia and public practice.The judging criteria were based on several keyelements such as objectives of research,originality, significance of research and overallcontribution in improving the practice ofaccounting.We congratulate the winners of the 3 rdMalaysian Outstanding Research PaperAward (MORPA 2009).Corporate Governance CategoryFirst Prize:The Impact of the Malaysian Code onCorporate Governance: Compliance,Institutional Investors and StockPerformanceEffiezal A. Abdul WahabUniversiti Sains MalaysiaJanice C.Y. How, Peter VerhoevenQueensland University of TechnologySecond Prize:Ownership structure and intellectualcapital performance in MalaysiaNorman Mohd Saleh, Mara Ridhuan CheAbdul Rahman, Mohamat Sabri HassanUniversiti Kebangsaan MalaysiaManagement AccountingCategoryFirst Prize:Interplay Of Financial Accountability AndTrust In A Corporatised OrganisationNor Aziah Abu KasimUniversiti Putra MalaysiaSecond Prize:The Effect Of Service Process Type,Business Strategy And Competition OnService Organizationsʼ Pms AttributesAnd Their Links To OrganizationalPerformanceAmizawati Mohd AmirUniversiti Kebangsaan MalaysiaAudit CategoryFirst Prize:Shariʼah Audit For Islamic FinancialInstitutions (Ifis): Perceptions OfAccounting Academicians, AuditPractitioners And Shariʼah Scholars InMalaysiaAssoc. Prof. Dr. Shahul Hameed Hj.Mohamed IbrahimInternational Center for Education in IslamicFinance (INCEIF) Kuala Lumpur, MalaysiaRatna MulyanyInternational Islamic University MalaysiaSecond Prize:Role Of Internal Auditor In TheImplementation Of Enterprise RiskManagement (Erm): An Assessment OfInstrumentʼs Validity And ReliabilityMohd Ariff Bin Kasim, Asmah Abdul Aziz,Isahak Kassim, Siti Rosmaini Bt Mohd HanafiUniversiti Tenaga Nasional, MalaysiaTax CategoryFirst Prize:Self-assessment Tax System andCompliance Complexities: TaxPractitionersʼ PerspectivesAssociate Professor Dr. Lai Ming Ling,Universiti Teknologi MARAAssociate Professor Dr. Choong Kwai Fatt,University of MalayaSecond Prize:Book-Tax Difference And Value RelevanceOf Taxable Income: Malaysian EvidenceRohaya Md Noor, Universiti TeknologiMARA, Prof Dr Barjoyai Bardai, UNITAR,Associate Prof Dr NorʼAzam Mastuki,Universiti Teknologi MARAFinancial Accounting andReporting CategoryFirst Prize:Corporate governance and earningsforecasts accuracyNurwati A. Ahmad-Zaluki and Wan NordinWan-HussinUniversiti Utara MalaysiaSecond Prize:Searching For A Link Between ThePractice Of Environmental Reporting AndThe Corporate Governance Structure –Recent Evidence From MalaysiaSharifah Buniamin, Bakhtiar Alrazi, NorHasimah Johari, Noor Raida Abd RahmanUniversiti Tenaga NasionalSpecial Award for Public SectorCategoryThe Relationship Between ChangeMessages And Communication Flow WithThe Commitment To Change: The Case OfGovernment Accountants In MalaysiaChe Ruhana Isa, Zakiah Saleh, Ruzita JusohFaculty of Business and AdministrationUniversity Malaya.Special Award for CSR CategoryCorporate social and environmentalreporting: Where are we heading? Asurvey of literatureDr. Radiah Othman, Dr. Rashid AmeerUniversiti Teknologi MARASupported by Official Sponsors for MORPA 2009CHARTERED TAX INSTITUTE OF MALAYSIADepartment of Higher Education of theMinistry of Higher Education MalaysiaMAREF REVIEW • 13

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